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Entrepreneurship resembles a philosophical quest where the challenge lies in transforming problems into opportunities. Entrepreneurial successes such as Apple, Amazon, and Tesla underscore the importance of user experience and the necessary response to real needs, at various stages of Maslow’s hierarchy or Epicure’s classification of desires. Solving concrete problems, measuring the perceived value by the customer, and finding early adopters are key challenges for formulating a robust value proposition. Ultimately, companies arise from the efficient resolution of concrete problems rather than superficial desires. Measuring both « the cost of the poison and the value of the antidote » contributes to formulating consistent value propositions.
E. Krieger
Are entrepreneurs the alchemists of the 21st century? For many, entrepreneurship indeed resembles a philosophical quest. It’s certainly not about transmuting lead into gold, but rather about turning problems into tangible opportunities.
The strength of a value proposition is measured by the gap between a problematic initial state and the situation resulting from the adoption of your solution. If adoption is smooth, the perceived value will be even stronger.
Epicure and Maslow in the land of marketing
The entrepreneurial chronicle is replete with extraordinary successes often based on unparalleled user experience, as seen in companies like Apple, Amazon, and Tesla. However, Maslow’s hierarchy comprises numerous levels where the useful intersects with the futile, as Epicure had already established twenty-two centuries ago with his classification of desires.
The hallmarks of value propositions belong to solutions tailored to local realities that preserve our very existence – health and safety – such as the innovations developed by the following companies:
- Sehat Kahani: This Pakistani telemedicine platform connects qualified doctors with patients in underserved regions.
- Zipline: This American company uses drones to deliver essential medicines to remote areas or those affected by disasters.
- Crisis Text Line: This international nonprofit organization offers a confidential SMS support service to individuals in distress or emotional crisis.
Circumventing or shattering a wall of problems
At the beginning of all these entrepreneurial ventures stands a wall of problems and an intuition to circumvent or shatter it!
A problem, or more specifically, a need not or poorly met by existing practices or offerings, represents an opportunity for entrepreneurs. Resolving this need ensures creating value for your customers and potentially for your customers’ customers. It’s also the best way to create value for your company, employees, and shareholders.
A good way to evaluate the strength of your value proposition is to quantify it, as much as possible. My colleague Frédéric Iselin proposes an enlightening definition of « CUPV » or Customer Perceived Utility Value. This value is defined as the difference between perceived benefits and perceived sacrifices. Indeed, one must not overlook the sacrifices required to adopt a new offering, starting with the need to change habits.
The cost of the poison and the value of the antidote
Another complementary way to understand the value proposition is to measure both « the cost of the poison » and « the value of the antidote. » In other words, what are the costs induced by the problem you wish to address and what are the benefits (time and/or money savings, among other indicators) induced by your offer?
For example, many European farmers are overwhelmed by administrative tasks, particularly burdensome as they involve redundant data entry with almost no assistance. This paperwork, which distracts them from their commercial and productive activities, is poorly received by most operators who did not « sign up for this. » If it’s estimated that a farmer spends an average of 14 hours per week on administrative tasks, a highly ergonomic software solution coupled with tailored assistance that saves 7 hours per week would have considerable value for these operators, beyond the strict valuation of their hourly rate.
Point Vision and Sunday: emblematic value propositions
Many value propositions can be measured in terms of time, money, and comfort gains for key stakeholders:
- For Point Vision, patients can get an ophthalmological consultation in less than a week, whereas waiting times are often several months due to a shortage of practitioners. Thanks to more efficient organization, these same practitioners can see more patients in a single day.
- For the fintech Sunday, restaurant customers can pay their bill in less than 10 seconds. On the restaurant side, revenue increases by more than 12%, and tips see an average increase of 40%.
The quest for early adopters: who will be your first customers?
Neither a disastrous end nor endless disaster, the domain of startups that never take off: rapidly acquiring the first customers is the best way to avoid falling from one extreme to another. Again, my colleague Frédéric Iselin defines early adopters as those who are « ready to pay the fastest and the highest, » which summarizes the characteristics of the audience that will most quickly appreciate your new offering, even when it’s far from perfect.
The acceptance by some users of an imperfect product that « gets the job done » is akin to a foul-tasting but highly effective syrup for sore throats: some people will prefer to ignore their pharmacist’s advice or even their family doctor’s prescriptions, while those most motivated to quickly regain their voice will ingest the syrup without hesitation.
What problem will you be the alchemist of?
At the core of extraordinary value propositions almost always lies an acute problem. This is the best way to avoid the « nice to have » syndrome.
In his proposed epilogue for the 1861 edition of « Les Fleurs du Mal, » Charles Baudelaire wrote: « For I have extracted the quintessence from everything // You gave me your mud, and I have turned it into gold. » Each has their own way of being an alchemist or a miracle worker.
Good luck, therefore, in identifying a stumbling block that you will transform into an entrepreneurial gemstone!
