Me: who’s first, the chicken or the egg?
Newton: The apple !
It may be confusing… I agree!
Even before I started writing this second blog, I brainstormed a lot (with the different Mahdi’s in my head) about which approach I should choose to introduce what is called VALUE PROPOSITION (sounds scary I know).
Let’s start with the first approach, the most academic one taught in all the business schools worldwide where you have to pay thousands of bucks to get access to. These Schools first ask you to find a problem, an issue, facing your community and your people. Leveraging on this problem by providing a solution will be YOUR IDEA… that will be transformed into a sellable product (we will talk about the solution design later in this blog).
When you try to have a more practical and less academic approach, meeting entrepreneurs or just reading success stories of serial entrepreneurs worldwide, you can notice that they didn’t, at all, take into consideration the need of the market (in other terms ”the problems facing your clientele”). They just had the idea of a product or service, they tried it, people loved it, and from there their entrepreneurship journey started!!!
One of the Mahdi’s in my head would take the example of a chocolate or the Tobacco Industry, none of their products are the solution of a problem… sometimes they represent the source of a problem instead….
Another Mahdi is answering: THIS IS NOT A NEED BUT A DESIRE…. The difference between them is easy to understand. Having a car is a need, having a super luxurious car is a DESIRE!!!
Thank you ACADEMIC Mahdi for the clarification!
(Meanwhile, at this moment, Newton is still thinking under his Apple tree).
There is a lot of approaches to define who’s first, is it the market that expresses a need to which an entrepreneur will bring a solution? Or is it the entrepreneur who creates a product that is directly adopted to the market? It is in this exact context similar to the chicken and the egg question… we don’t really know who’s first! But there is some kind of attraction. All success stories started in the right time. They started at a moment where both the market felt a specific need, and an entrepreneur had a specific offer.
Newton: ATTRACTION ATTRACTION ATTRACTION….. there is attraction even in business!
Me: YES, and this kind of ATTRACTION can be created!
As for the product and the need, in a practical point of view, we don’t really need and/or want to know who should be first… we just expect a great deal.
So now, let’s go back to the Value Proposition. This term has been invented by academic lecturers and researchers. They focused in their approach on the PROBLEM! We respect them, and will use the same terminology, even if we don’t build our business according to that.
Through the Value proposition, you just need to show that your product/service is a SOLUTION. Instead of starting by the product, you start by the problem. (Academics say that that’s how you should start, not me… But I confess that it is a more seductive manner to sell your idea). To build your Value proposition, just fill in the gaps the following:
” I SOLVE THE PROBLEM OF………… FOR PEOPLE WHO ARE…….. BY PROVIDING …… UNLIKE OTHER SOLUTIONS THAT……”
CONGRATS, you have your Value proposition!!!!
More seriously, the problem you solve is defining your activity, the people facing it describes your prospective target customers; what you provide is your solution (product or service), Unlike other solutions means how is your offering significantly better than other alternatives.
Sometimes it’s hard to formulate the best value proposition for your product/service. When it comes to the non-profit, it’s much easier. People in front of you know that you’re not doing it for business reasons, but for an impactful change in your community. But when it comes to a for-profit entity, then you need to spend some times on this, and try to be as hypocritical as possible…. Oups, I meant sincere (One of the Mahdi’s was thinking out loud).
Best Case Scenario: You have a wonderful and amazing Value proposition… NOW YOU’RE READY TO DESIGN YOUR SOLUTION….. But what does that mean?
Another Blabla that refers to a set of very easy and logical actions to conduct before going to the market.
It goes without saying that before you go somewhere you first need to know how is this ”somewhere” like… Is it cold like Boston where you have to take your coats and gloves with you everywhere? Or is it hot like Algiers where you should take anything else but your gloves?
It’s exactly the same for a business. Before launching your product/service you need first to get to know your market to prepare yourself properly. Another way to say ” A MARKET RESEARCH”.
So now that you have an initial value proposition, you will need to conduct research in order to understand: THE TARGET MARKET.
What market segment are you going after? Both Boston and Algiers are big, you need to know the exact area you’re going for…. The market is big, you need to focus on the neighborhood you need to go to first. The best way I have found for perfectly targeting the market segment is the following:
1. Think about your perfect customer. By ”perfect” I mean the one who will buy your product/service without communication on it, without any kind of efforts in terms of packaging or whatever. The one who will buy it for sure (your friends and you family are not concerned … thank you).
2. Describe that customer (gender, age, ethnic, revenue, profession, hobbies… etc).
3. Where and how many are they?
4. What is the growth rate of this segment? I mean, are these customers corona virus infected people, and once passed away (or recovered if you want to be optimistic), this segment will disappear ??? Or will it grow because the Corona will be everywhere in a few months? (good for your business, but dangerous for your health !!! ). Anyway, is your segment growing or not, with a rate of growth, to see if you are in a growing Market, so your business will grow with the growth of the market.
Now we’re done with the customers… we need to have a look to those who are doing the exact same thing as us!
Perfectionist Mahdi: But no, your product is unique, no one is doing the same thing as you!
The Mainstream lover Mahdi: An egg is an egg…. a chicken is a chicken… I don’t care if this chicken, while alive, was sleeping listening to lullabies hugging teddy bears!
So talking about the competitors, just answer to these 3 questions:
1. Who are your competitors?
b. What is your competitive advantage?
c. How do you add value that the others don’t?
And since no one is an island, you’ll need to work with partners, as part of a big interest network in the tech sector, the activism sector, the arts sector, the green sector… etc. We will call them ECOSYSTEMS. Then you need to think about the following questions
1.What partnerships will it take to build your product?
2. Who will be your suppliers/partners/buyers?
3. Who will be using your product?
4. Who will distribute the product and how?
When you gather your answers regarding your costumers, your competitors and the ecosystem, you have done what is commonly called a MARKET RESEARCH. The way you will present your results is just a packaging that is taught in business schools. What matters for you is the pieces of information you gathered and the way you are having a clear mapping of your market, ET voila!
Wait a minute, this is not a market research, and this is just a bunch of ASSUMPTIONS!
The next blog will be focused on how to confirm (or not) these assumptions in order to have a proper MARKET RESEARCH, and how to tailor your product/service to have enough ATTRACTION and be ready for the next step of your Entrepreneur Journey ”THE GO TO MARKET”….
Notification: Newton likes this post