Alright, so before we break for the weekend, let’s talk about the part of the journey where you’re going to encounter things that will aid you. With the Unicorn Factory, we focus on this. You have a development team that understands the mission, a coach who will work one-on-one with you to help you craft your narrative, and your instructor, which is me, who can guide you. For some of you, you have angel investors who will provide the runway for your MVP.
However, you will also encounter obstacles that can halt your progress. Most of these obstacles are mental enemies; they’re rooted in how you think. I’ve tried to give you a heads-up on these. It’s about recognizing these mental barriers and learning how to overcome them. It’s about understanding that the biggest obstacle in your path is often your own mindset. It’s about learning to see these obstacles not as roadblocks but as stepping stones to a better future.
Remember, the journey of a thousand miles begins with a single step. So, take that step. Embrace the journey. Embrace the struggle. Embrace the opportunity to learn, to grow, and to become better. Because that’s what being a founder is all about. It’s about becoming better, not just at building startups but at understanding yourself and the world around you. It’s about becoming a better version of yourself.
I’ve been receiving feedback that many of you would like me to delve deeper into the concept of the value proposition. It’s important to remember that human beings have different learning styles and communication preferences, so one approach will never fit all. In this regard, you should rely on your work ethic and do some research—there’s a wealth of information out there on value propositions. It’s easy to find a method that resonates with you. Listen, don’t be stingy; pay the small fee to a social media expert for the information. Its worth it. You will always generate more money, but you will never have more time. Make a shift in your thinking. Saving money is pointless; what you want to save is time. A billionaire knows something you don’t believe. Time is more valuable than money. Be frugal with your time, not your money. Make up your mind to change the makeup of your mind. Trust that you will figure it out. No matter what happens, you will be okay. So focus on getting what you need and leave the rest. Judgments and biases are the mask of insecurity. Flip the script. What I will do is provide you with some unique insights into how to think about a value proposition.
Let’s start with the term ‘value’ in this context. Write down this definition because it is the most insightful one I’ve ever come across. Value is the surplus of benefits over costs associated with a solution versus the alternative. It is almost always a financial benefit, even if the customer isn’t aware of it.
Let’s look at this scenario. Louis Vuitton vs Department store bag what's the value proposition. I'll give you a clue it's not celebrity endorsement. If I buy a Louis Vuitton bag for $20,000 versus a department store bag for $500, there is a massive surplus value? The Louis Vuitton one has a social benefit, of course, but consider this: The Louis Vuitton bag will last me over 50 years, which means I paid $400 a year for it. The department store bag cost me $500, and I have to replace it at least twice a year, meaning I spent $1000 a year, over the same span of time. The Louis Vuitton bag had a financial benefit of $55,000 over the same time span. That is more than I paid for it. Plus, there is the added bonus of a social benefit, which can be translated into a financial benefit as well. The point is that there is more to a customer's decision than just how they feel, especially if you want that experience to be repeatable. If you don't understand that as a product manager you might weigh style over quality. Sure you will sell a few more bags in the short term but when fashion changes as it always does you have a massive drop in sales and soon like most luxury brands you are out of business. Focus on the financial benefit versus the alternative. A company that has 1000 employees and uses AI can increase their productivity by a factor of ten because each employee now has a personal assistant with a 135 IQ. Do you think there is a financial benefit to that? You bet. now you are creating value. So, concept number one: ask the question, What is the financial benefit versus the alternative? That is a concrete test of whether or not you are creating value.
The next one is to focus on the customer segment, and since you are a startup, that means you focus on a subset of a customer segment. You want an actionable segment of your audience that you can communicate with. At Onli, we turn down about 20 ideas a month. Most people come in looking to boil the ocean. This is not a field of dreams. Just because you build it doesn’t mean they will come. Technology is not a business. Technology is a tool. You have to build the business. If you are a startup, that means you have to make a proposition to a customer that creates value for them. The technology doesn’t do that. You do. We don’t make suits. We are the fabric of innovation. You are the tailor; you make the suits, and as an entrepreneur, you open a store that sells the suits. Your value proposition is the thesis you are trying to prove. I think about it like this: I think about the scenario that if I have 30 seconds for my salesperson to sell my product, then I want them to communicate with a simple sentence about [who we are] and [what we do]; then the list of challenges} that people in that space, face; and then they can ask, Is this true for you? I’ll use one of your use cases as an example. We are a digital marketplace that provide a way to monetize your investment without losing ownership, offering quick access to funds and financial flexibility. Clients come to us when facing challenges like waiting for investment maturity and having limited access to liquidity as a foreign investor. Does any of this ring true for you? From there, I can backward engineer my value proposition using the framework. For (target customer segment) dissatisfied with (existing solution) due to (key unmet needs), (venture name) offers a (product category) that provides (key benefits). This value proposition highlights the target customer segment (foreign nationals), their dissatisfaction with existing solutions (they are unworkable, unavoidable, undeserved, and urgent), the key unmet needs (limitations and waiting for investment maturity), the product category (debt instrument marketplace), and the key benefits (liquidity, quick access to funds, financial flexibility). I can do that because I focused on customer segments. I thought about "who specifically" I am creating value for.
Now, once you’ve identified your customer segment, you want to immediately move into the problem space. This is where the real value lies. You want to identify a problem, but more importantly, you want to evaluate that problem to see if it’s worth the investment it takes to solve it. This is where you delve into the Four U’s: Unworkable—it's a broken process with consequences; Unavoidable —to achieve a goal, there’s no avoiding the problem; Underserved —what are the alternatives to addressing the problem; and Urgent —the customer prioritizes solving it. Additionally, I always ask, "Is this a problem for a large market segment?" because this is called the Unicorn Factory, not an incubator.
Once you have a solid grasp of the problem segment and the customer segment, the solution usually becomes apparent. At this point, you want to avoid getting caught up in feature sets. Instead, identify the customer journey and map the experience of what it was like before and after your solution. That’s how you know you’ve solved the problem for the customer. Then, you want to identify the financial benefit of that for the customer. Once you have those, you'll know what value you’ve created. You can then engage in the task of building that experience.
Don’t make the Lean Canvas your enemy. It’s your ally. The difference between a comedy and an adventure is when the hero makes his allies enemies, gains the prize, and loses it because they couldn’t recognize that they had what they needed all along. The Lean Canvas is your strongest ally because it’s your map to the treasure. Become an expert at doing them. Do a few for established companies and for mythical companies. Practice until you get it right, and then practice some more until you can’t get it wrong.
Being a founder means you’re a professional with a particular set of skills. The core of those skills is the ability to identify problems, build a map to a solution, and encapsulate them into a value proposition. Founder means "he who goes first." You have to know where you’re going. The Lean Canvas is a tool that helps you map that out.
Enjoy the weekend. Do your homework.
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