Why you need a good value proposition for your Startup

A lot of Startup founders come up with ideas that they feel, would make millions. They believe that speaking passionately about the ideas, investors would open their purses and dole out the much-needed cash for the businesses.

Ideas come a dime a dozen, but investors want to know why they need to invest in a Startup. So Startup founders should be armed with compelling value propositions. They need to be able to convince the investors and they also have to have a compelling story for the prospective customers. They need to convince the customers too.

What is a value proposition?

A value proposition is the value you promise to provide to your customer. It states what a customer should get from you, in terms of product or service. It also states what sets you apart from competition. This is what your prospective customer would use to evaluate you and choose you above competition.

So, it is very important to have a very clear and concise value proposition

Characteristics of a good value proposition

1. It is clear and concise
2. It defines what you do
3. It quickly communicates benefits
4. It differentiates you from your competitors

Here are some examples of good value proposition

Shopify

Shopify is one of the most popular providers of ecommerce solutions to small and medium sized businesses. Shopify is a complete commerce platform that lets you start, grow, and manage a business.

With Shopify, you can:

• Create and customize an online store
• Sell in multiple places, including web, mobile, social media, online marketplaces, brick-and-mortar locations, and pop-up shops
• Manage products, inventory, payments, and shipping

Shopify’s value proposition says that it can handle all of your e-commerce needs, no matter where you sell from.

Zoom

Zoom is a cloud-based video conferencing platform that can be used for video conferencing meetings, audio conferencing, webinars, meeting recordings. Launched in 2013 by CEO Eric S. Yuan, a Chinese-American billionaire businessman, engineer, Zoom had 400,000 people sign up within the first month. The number of Zoom users grew rapidly during COVID-19 era. As at April 2020, Zoom had about 300+ million daily meeting participants.

Zoom Value Proposition states that you can “engage new audiences, elevate customer experiences, and get more done together with our all-in-one communications platform.”

Uber

Uber is a mobility as a service provider. It operates a digital platform that leverages the company’s massive network and technology to transport people and goods from one point to another. It provides ride-hailing services through its mobility business, food, grocery, and other delivery services through its delivery business, and freight shipping services through its freight business. Uber’s platform works to connect people and businesses needing these services with individuals and businesses that provide them.

Let’s consider its mobility business. It provides value to two sets of customers – Riders and Drivers.

Uber’s Value Proposition for Riders

• On-demand cab bookings (Convenient)
• Real-time tracking
• Accurate ETAs
• Cashless rides
• Lower wait time for a ride
• Upfront pricing
• Multiple ride options

Uber’s Value Propositions for Drivers

• Flexibility to drive on their own terms
• Better income
• Lower idle time to get new rides
• Training sessions
• Assistance in getting vehicle loans
• Better trip allocation

Conclusion

A value proposition is very important to all stakeholders and startup founders must spend time crafting their value propositions as it can make or mar them. It should be simple enough to ensure that customers, investors alike understand them and differentiate them from the pack of competitors out there. If you need help crafting your value proposition, there are value proposition templates you can use.