Strategyzer Webinar: Ask Us Anything About Value Proposition Design

Hi everybody and welcome to another Strategyzer webinar session. Today's topic is an Ask Us Anything about Value Proposition Design. This is a unique opportunity for audiences to ask the authors directly about challenge areas that they face with the tools, the concepts, or the book itself. If you're on social media, you can find us on Twitter aStrategizer. Feel free to tweet your comments, your thoughts, or any other insights you may have about this session. You can also use the hashtag StrategizerWebinar to collect your thoughts. For those of you who aren't familiar, we have a blog as well. It's blog.stragizer.com where you can dig deeper into many of the insights that we will be discussing today, as well as the tools and the concepts that you may be familiar with already. I'm your moderator Kavi Gupta and I head the content team at Strategizer. I'm responsible for the production of articles, webinars, podcasting and our social media community. Many of you may have seen my name in the emails that go out regarding these webinar sessions. You can find me on Twitter as Avigupta. Our host, as always, is Alex Osterwalder, co founder of Strategizer. Alex is also lead author of bestseller Business Model Generation and Value Proposition Design. You can find him on Twitter as lexosterwalder. Our guest is Gregory Bernarda, who is co author of Value Proposition Design along with Alex Osterwalder and Yves Pinier. He's also a Search Strategizer coach. For those of you who are in Asia, this is our first broadcast to the Asia and Pacific audience. We're also hosting a two day masterclass in Hong Kong for you to dig deeper into the lessons and concepts of Business Model Generation and Value Proposition design. Gregory Bernarda, who is our guest and co author of Value Proposition Design, will be leading that workshop and it's a chance for you to dig deeper and get fully immersed into the concepts that we will be talking about today. Many of the tools and the concepts as well as the devices that we discuss can also be available in our resource library. Simply visit strategizer.com register and you'll be able to access 30 plus tools, canvases and templates to help you create better value propositions and businesses. Let's get started with the session. We'll jump right into the questions.

How would you describe the difference between a product and a value proposition?

Greg, you want to go for that first and maybe share some of the experiences that you also have in your work with customers around the world.

Yeah, sure. So the way we define it in the value proposition design book and methodology is that a product is part of your value proposition, but a product in itself doesn't tell you how you're going to help a customer. So that's why we have what we call the value map, the left hand side of the value proposition canvas, where we do list products, obviously the tangible or the real things that people, customers can interact with. But we also obviously focus on what we call pain relievers and game creators, which is all about understanding how this product or this service is actually helping address the jobs, pains and gains of the customer. So what we tend to see a lot of and especially in companies that are maybe tech focused or R and D focused, is that they have great technology, maybe great products, or they think they have great products and great services. And the way they describe them is by basically touting the features of the products. You can do A, B, C, X, Y and Z with this product, but it actually doesn't connect with how a customer or the situation that a customer finds themselves in and how this product or this service is particularly helpful to alleviate their pains or to create new gains for their customers. So I think that link is often missing and being able to spell it out and to visualize it very clearly on the value proposition canvas is often a very simple thing, but it's often very much of an aha moment, I think with people that we work with in organizations.

Alex, I think Greg really hits the nail on the head by saying you want to visualize and make tangible explicit how you create value for customers. So I'll. I like doing this little experiment that I suggest and anybody tries to do this once if you go talk to businesses, people in product development, marketing or even in startups when you go to an incubator. So ask the people you're talking to, how are you creating value for customers? Simple, very simple question. And you can bet quite a bit of money on how they're going to answer. Most people will tell you a lot about their product, they'll tell you a lot about the features. But that doesn't answer the question how are you creating value for customers? It answers the question of what's your product and how does it perform and so on. But that only really matters if it connects, as Greg correctly pointed out, to something that matters to customers, to the jobs, pains and gains that your customers have. So you really want to not just talk about the features. That's okay, because after all products and services have features, but you want to make explicit, that's what we do with the value proposition canvas in the pain relievers and gain creators. You want to make explicit how your products and services and the features of your products and services actually create value for customers. How does it help them, like a headache pill, to alleviate some of the, the pains that your customers have? How does it help make some of the objectives that they have completely real? So that's a small experiment that I suggest you do. Go ask somebody, how are you creating value for customers? And you can bet that they're going to talk about products and features. Of course, you'll get some of those outstanding people who will really answer the question with why their products and services matter to customers and how they create value. So I think that's something we really need to chew on. And one more point to that is companies are very good at talking about the performance of their products and features. My product is this fast, it's this good in terms of quality and precision. But what you really want to say is, how does your product perform and what are the expectations of your customers? Your customers want to increase their revenues by this much and our product helps them do it at this level. So you want to really be as good at quantifying the jobs, pains and gains of your customers as you are for quantifying the performance of your products and services. Companies are good at quantifying the performance of their products and services, but they're not necessarily always good at making explicit the expectations of their customers in terms of what are the biggest pains and quantifiably, why does that matter to them? Quantifying on the customer side is just as important as on the product side because it will. Another point will help you a lot with pricing and value based pricing.

So for somebody. Go ahead, Greg, go ahead.

Yeah, Gavi, just add something. I think there's a nice connection to make here with Clayton Christensen's Disruptive Innovation.

Right.

If you focus a lot on your product and trying to make, as Alex has said, is focused on the performance of the product and making your product better, you tend to kind of try and increase that performance of the product and it might actually not matter for the customer ultimately. And that's the thing with the value proposition. You really want to understand what matters for your customers, jobs, pains and gains, and, and understand how you can create value. It's not always by increasing the performance of your product or your service. You might come up with something a lot more simple, a lot more accessible, easy, to use, for example, a lot more cheaper. Why not? And that might be enough for a large portion of the customers that you traditionally address with a more standard product. And I think that is kind of the essence of Clayton Christensen's disruptive innovation, which is really at work across I think the majority of industries out there.

Yeah. To add to that, I'll give you a very concrete example that illustrates Greg's point. Maybe a bit less about disruptive innovation, but a lot about maybe not just increasing the performance of your products and services. Two weeks ago, I had the opportunity to meet the CEO of Hilti, a company that makes machine tools for builders. And at one point a bit more than a decade ago, they learned that their customers were actually not interested in more performance of the tools. They said, well, that's great, but it's not going to help us a lot. That's not really what we're struggling with most. So Hilti really went deep on the customer's jobs, pains and gains. And what they really found out is that the biggest struggle for construction companies is to have the right tools at the right place at the right time. So completely a much bigger job with a lot of pains and a lot of related gains. And once they understood that, they designed a new value proposition that still included tools. Of course, that's the core of their business, but helped a lot more with what really mattered to customers. So Hilti set up a service called it was an online fleet management service and a tools on demand service where they would make sure that their customers, the construction companies, would have the right tool at the right place at the right time, so they would really alleviate one of their biggest pains. And by doing that, the construction companies had a much better view on their cost, which is important in a low margin industry. In that case, it wasn't about improving the performance of the tools, it was about creating a new value proposition that addressed a much bigger job. So it really illustrates what Greg was talking about. Sometimes improving what you have won't make a difference at all to your customers. So changing the perspective, reframing it is what's important. And Clayton Christensen, who together with Tony Ulwick made the whole jobs to be done concept so popular, and Tony Ulwich helped invent it. There you really have that reframing. We don't want to focus on what we're offering on our tools. We want to focus on the jobs that our customers are trying to perform. And that will give you a completely different perspective. And it will also force us to ask our customers different questions to understand them better.

So one of the challenges that a lot of our audiences face is finding those customers. And if they can't find those customers, they are curious to know if it's okay to look at what the competition is doing. What do you guys have to say about that?

So I'll quote something that I've seen on Twitter. Unfortunately, I can't remember who, who made that statement, but it was a funny one. Somebody on Twitter said, if you focus on competition, your products and services will look like your competition's ass. I don't know if Holger is going to visualize that, but I think this obsessive focus on competition is something we see a lot, and it's not very good and not very helpful. I mean, you don't want to be naive about competition. You need to take competition into account. But I like Jeff Bezos approach a lot better where he says you want to obsess over customers, not over competitors, which he made explicit in his last letter to shareholders in the last annual report. So that's definitely a much better approach. And there's always ways to connect with. With customers. And I think Greg can maybe share some experience of helping companies actually get in touch with customers, not focusing on competition.

Yeah. So I think maybe to the question also that you posed Gavi there, I think if you have no clue whatsoever about who your customers are, of course looking at the customers of your competitors might be a starting point. Right. And so there's many ways of kind of looking at what exists and maybe looking at what you can do differently, differentiating your offer, your value proposition from that of competitors. But beyond that, customers are everywhere. So if you have a bit of a beginning of an idea of what sector of what business you might be in, even just starting very simply with an idea, you can always go into context and situations where your customers or where would be customers are, where people are having the problems that you want to solve or trying to get new gains in those situations and observe, spend time with them, consult with them in a B2B environment, why not to try and understand those situations and those customers better? And I think that's just a great starting point because it becomes very real very quickly. And that's something I think that we don't see so much in large organizations. Especially in startup, we see it a lot more. But in large organizations, it's very hard to get executives to simply leave their desks and not call a research agency, but actually go in those situations where maybe potential customers might be finding themselves and spending time with them.

So.

So I think here are two starting points I would consider when trying to figure out who the customers might be.

Yeah, and we hear a lot of excuses and I like calling them excuses because we see how it can be done differently. Where executives say, oh, but if you're in consumer goods, if you're in business to consumer, that's easy. If you're a Colgate or. But I think it's actually even easier in business to business because you have a close relationship with customers or when you're starting out, you can actually really get in touch with business to business customers a lot more in an easier way and you can have really deep discussions. I think we just need to overcome the hurdles and get in touch with customers. And I think what Greg pointed out, that sometimes senior leaders have the tendency to hire agencies to do the customer research. That's a big issue. And we really push companies and very, very senior leaders of large business units actually roll up their sleeves and take the time to test their ideas, their strategic ideas with customers directly and then iterate based on that. So this whole lean startup approach that we know from the startup world I think applies just as much with senior leaders. And once you get people to start, they're really excited about doing this. And we've seen this in business to business and business to consumers is really about getting people to roll up their sleeves and learn how to do this, which is not easy. You need, you need to work with people who've done this, who are experienced. And if you want to work with an agency, work with an agency to accompany you, but not to do the work because this is very fast paced where you need to make decisions very quickly. An outside agency can't make the decisions for you. You're the strategic leaders of your company. And that is the same if you're a billion dollar business unit or if you're a startup that's starting out, you're the only one, either the senior leader, the CEO, head of a business unit, or the team who can make the decisions. So getting out of that building, as Steve Blank likes to say, the grandfather of lean startup, is essential for the leaders of any company of any size. And connecting that with fast paced iteration is important. There are of course a lot of senior leaders who talk to customers, but it needs to be connected to iterating your strategy, iterating your product development. It's not just about maintaining customer relationships and going for lunch or for dinner with them. It's really about making more informed strategic decisions.

So we have A lot of examples in the book and in the tool sets about how to connect with these customers through various experiments in the consumer B2C kind of landscape. Do those types of tests and maybe you can touch on some of them. Alex and Greg, concretely, can those same types of experiments be used to talk to B2B customers as well?

Yeah, I'll let Greg go ahead because I was talking a lot, so. Go ahead, Greg. Sorry.

Obviously the principle and the mindset doesn't change from a B2C context to a B2B context or even a business to government context. The idea is that you're putting learning ahead of trying to make your idea work. So the principle and the mindset doesn't change. I think some of the tools can be the same and some of the tools need to be adapted. So in a B2C context, using the web, for example, to be it in a Kickstarter type of environment, crowdsource, sourcing, sorry, crowdfunding environment, or working with AB tests on landing pages and things like that, we can go more into that if needed. But those are very popular tools, very popular methods, especially with digital startups. In a B2B environment, it's often more face to face interactions with people and here the tools just need to be translated into analog formats. We've worked with people in B2B environments that for example, prepare fake brochures of a product that has not been developed yet, but it's formatted as a brochure to give the impression to the customer that this is actually a real product that exists and it's used in a meeting to get a conversation about what, what's good or what's bad, what needs to be improved about that product, what we've seen, and I've been recently, both Alex and I work for a large pharmaceutical organization. If you think of an industry that has a lot of constraints, need to be very careful about how they handle both their reputation and the whole legal environment here. For me, it was an eye opener about how much freedom you actually have within those constraints to to apply those same principles. So even in negotiations with the government, for example, the payer, you can go into those very formal conversations with a frame of trying to understand what would make them change their minds about a particular set of data they would accept or not or really what are the triggers that really they look for in order to validate or invalidate a product. The teams that we are working with are making huge progress not only in trying to understand if their products are going to go all the way to market. But they're making huge progress in terms of learning about what works in general and as it applies to a variety of new products in their organization. So I think there's really just a lot of creativity that can be had in terms of applying these tools and methods in business to business context as well.

I think creativity is the key word that Greg is mentioning here. This is state of the art. Lean startup in itself is a young process testing ideas rapidly and iterating. And it's being applied in B2B. But we're at the forefront of this. So you really need to be creative around how you test ideas. And as Greg pointed out, you can do this in extremely regulated industries. I don't know how much more regulated it can get than in the pharmaceutical industry. The other thing I think that really needs to be pointed out is one of the big pushbacks that people have when we're talking about B2B, for example, they will say, yeah, but we're in capital goods investment. We have these big machines that we're doing and selling. We can't prototype something and then show it to customers. That in itself costs a lot, etc. But that relies on a wrong assumption, the assumption that you actually need to build something. I think people take the build measure, learn principles of lean startup a bit too literally. They say, oh, we can't build this. You don't need to build something to test your ideas. One example that Greg just mentioned is, well, you can make a brochure and then you need to be transparent afterwards that you're testing this. But I think you don't even need to start with product. The first and most important thing you need to do when you start designing products, services, value propositions is understanding what really matters to your customers. The jobs, pains and gains. You need to start with the essentials. You can test the jobs, pains and gains before you even think about products and services. You need to understand what are my customers trying to get done? What are they struggling with most? What is their biggest headache? Once you understood that and you validated that, you got evidence that, hey, 10 out of 20 customers said, this is my biggest concern, this costs me millions of dollars. Then you have a starting point to think about, then your value propositions, your products and services. So the building part, building a prototype or anything, even the brochures, that happens after you have a very good and validated understanding of what matters to your customers. The jobs, pains and gains. So I think there's this misconception of this whole lean Startup process and testing and value proposition design that you actually need to build something first. There's absolutely wrong. And it can often be very expensive and get you off on the wrong track because technology prototyping is very expensive. You can actually lose money very quickly because you built something that was in completely the wrong direction. Steve Blank has a good example here of Ceres Imaging, a company that started out, still is working on precision agriculture. And their first idea was to build drones to measure with a hyperspectral camera to measure certain aspects of the fields for farmers. And their first experiment that they thought they should be doing is building drones with hyperspectral cameras. That's very expensive. Right. So what they figured out is there's a lot easier way to test this. Number one, they would start understanding, do the farmers need the data? Will they pay for data? Then once they figured that out, the farmers told them, well, why do you need drones? There are these crop dusters that fly over our fields all the time. Couldn't you just attach a camera there? So they realized that their testing of the technology in itself was completely flawed already that there were cheaper tests. I think we need to be very creative. As Greg pointed out in the way we test things in B2B, you really want to bring in customers and work together alongside with them as well. Well, we now hear a lot of companies that are working on value proposition design asking, should we bring in customers into the workshops? Absolutely. Then there's techniques there that are pretty established, like innovation games, where you can work together with some pretty playful tools. You work together with customers to do very effective product development. So I suggest you check out Luke Coleman's work around innovation games to also learn how you can work with B2B customers.

So one of the interesting questions that I'm seeing in the chat box, and one that we had been submitted by an attendee, is the idea of selling this either to senior management within the organization or other teams like sales or a product team that is so focused on executing on a known value proposition and all the resources are given to that existing value proposition. How do you go about convincing people internally to also maybe take some time to focus on this or the new value propositions that are potentially out there?

Should I get started, Alex?

Yeah, I can get started. You want to go, oh, yeah, I.

Can say a few things and you can.

I have a couple of arguments. Let's go ahead. You do this quite a lot, so I think that we can learn a lot from that.

Yeah. So obviously it's like with Anything with personal change, if you're on a diet or if you want to build muscles or if you want to start to meditate or whatever, it's a lot easier to help someone who is already willing to change. And so we see a lot, I think as soon as an organization wants to change, is interested in building new value propositions and new business models, it becomes a lot easier to go in and share what the tools can actually do. Because it, I think, echoes very strongly with the needs and with the, I guess, context that people are in in terms of what they need as far as innovation is concerned. I think for new, for people that are maybe a bit more resistant to this, I think there is two ways at least. One is that you can maybe scare them and show how much in their environment is actually changing and show the stories of Kodak, of all of the others, that for a reason or another kind of missed the boat. And I think often these stories echo very strongly with any type of organization. I think it's often the same reasons that have prevented people from seeing what's next and from being disrupted by a new startup or a competitor and so on and so forth. The other side to this is trying to inspire them. And so, especially in workshops, which we do, a lot of, I think stories are very powerful. It's a very powerful means of showing to people that it is actually possible to do something different than what has been done in the past. I think a lot of people think that they can maybe not be successful with something else. They don't know how to start. They don't think that it's actually the job of a large organization to innovate. Maybe it's only startups that can do that. So showing that there are successful examples out there of large companies or simply companies that are able to take on that change and be successful and have a whole process where it's actually all good for the company, I think is quite powerful as well. I think people start being empowered by these examples and see if they can try to imitate those other companies. And I think maybe one last thing here is that there's also a consideration not so much in terms of what to do or what value proposition or business models to create, but what structure you put inside the organization in order to allow the organization to be able to innovate in the first place. And here I think this opens up a whole other topic where what we would like to talk about is this notion of ambidextrous organization, where organization that are interested in innovating organize themselves into one part of the organization focusing on executing on the present and making small tweaks and evolutions to the current products and services that they have on the market. And one other part of the organization that's focused on basically preparing for the future or experimenting for the future. And these two environments, without going too much into details here, basically need to be ruled and organized in completely different ways. Different KPIs, different types of people, different time frames, different processes and so on and so forth. And I think one example, for example, out there is the Apple Watch, for example, but that's just one out of.

Many.

Has been put from the start as a separate organization different from the main Apple organization. And that piece of the organization was basically set free from the kind of probably overly bureaucratic processes of a large organization that is already running, has products on the market and so on and so forth, so that it can start organizing and designing its own organization such a way that is fit for its purpose of bringing something new out there. Alex, I'm sure you have a lot more examples and ideas there.

Yeah, I actually have one very concrete thing that last week I had the opportunity to be on a panel with Michael Porter, the strategy, the person who defines strategy, and Peter Brabek, who is the chairman of Nestle, biggest food company in the world and has been CEO before at Nestle and has been really leading the company for the last decades. One of the things I really want to point out is that many of the established players today in industry, and I want to take Nestle as an example there, are extremely good at renovating, at sustaining innovation. Nestle is 150 years old. You don't stay around for so long if you're not extremely good at managing the existing. But I think what's happening today is that you also need to create completely new growth engines. And if you take Nestle, they had one amazing growth engine that they created called Nespresso. But Nestle needs to be able to churn out a Nespresso every couple of years. I don't believe they have the systems in place yet. So to frame this, I think Nestle is very, very good today at technology innovation. They're really playing in the health space. They're investing a lot of money there. But where I think they're weaker, just observing from the outside, is the ability to create new business models. Business model innovation. While they're remaining excellent, as they are already now at sustaining innovation and renovating and doing technology, I think product and technology innovation is mainly used today for Sustaining existing business models. If we go back to the Kodak case, they were actually good at technology innovation, but they were really bad at business model innovation. And in that case, in extreme case, that's why they went out of business. They actually innovated themselves to death. So what you were mentioning, Greg, we need the ambidextrous organization where we can do sustaining innovation, which I think R and D, we're doing a good job there, research and development, product innovation, technology innovation. But we need really the skill set and space and organization in our companies to do business model innovation while we're remaining good at sustaining innovation. That doesn't exist yet. And I think in particular at Nestle, just to point out one example, I think this is not a skill that's there yet, which is probably the case for 90% of all large organizations. Very few. Sorry to point out Amazon again, but you read Jeff Bezos letter to shareholders, you'll see that they actually put in place this culture that can systematically create new growth engines. That's why they were able to create a $10 billion business around Amazon Web Services, which has nothing to do with, with retail, but builds on the same kind of IT infrastructure. So the ability to improve the existing and invent the new at the same time is extremely, extremely important. And just to kind of bring that home. I think the great argument, the question was, what are the arguments here? In addition to technology, innovation is not enough. Which is, I think an excellent argument. One that works really well. It's different from business model innovation. The other argument is that innovation, if we're not talking about research and development, if we're not talking about technology, to start with, innovation is not expensive. People have this misconception that business model innovation is extremely expensive and extremely risky. If you actually do it right, you start small with your ideas and you test them with customers immediately. That is cheap. Talking to customers doesn't cost you a lot of money. That will allow you to reduce the risk and uncertainty that your ideas will go wrong. Innovation at the early stages is actually very cheap. It gets expensive when you invest in technology and product development, but that should come a lot later when you validated your ideas. Two big arguments for me is that we don't have the capacity to do business model innovation, which is very different from product and technology innovation. Business model innovation, new value proposition innovation actually helps leverage the technologies. That's one thing. And the other argument is innovation is not expensive. And if you do it right, you can reduce the risk and uncertainty of innovation in a big way. So there's some myths around still, I think in innovation, which already is a term for product innovation, process innovation, technology technology innovation, business model innovation. We need to clean up with these myths to really show what state of the art organizations like Amazon are doing today to create new growth engines systematically.

So as we kind of wind down to the later end of the webinar, I'm going to start picking some of the audience questions that have been coming through and here's a really interesting one for you guys. A member of the audience has asked why do we keep using the same examples all the time? And Alex, I think you'd be. I'd love to hear your answer to that one.

Yeah, I think so. Those who really succeeded and where we can see results, they're very few. GE is held up as an example often for doing Lean Startup. Well. Jeff Immel, the the CEO of ge, holds up the book Lean Startup and says we need to do this. That's an example. Amazon is an example. They're very transparent on what they're putting in place to do this. I mentioned the shareholder letter a couple of times by Jeff Bezos where he doesn't just say we need to obsess over customers, he also says there's one thing they do really well at Amazon, it's failure. It's the best place, he likes to say. That's what he writes in the shareholder letter. It's the best place to fail in the world. There are very few organizations today where you can actually fail. And I'm not talking about big failure where you lose 100 million or a billion dollars, but systematic failure to learn, to experiment with your ideas so you can make informed decisions because you tried out a lot of things and you know what works and what doesn't work. There are few places today where that is done strategically. So there are a lot of companies. I'd say most of the companies I meet are actually trying to do this, but there are not that many success cases because it's extremely hard to do to create what we like to call the invincible company that constantly reinvents itself while they're successful. There are very few examples out there who do this over a longer period of time. And there will be more. And I think those who don't look at this at all will disappear.

Awesome. Let's talk a few concrete examples or any stories both you and Greg have to share about the types of roles inside of organizations that are making use of the value proposition canvas. I think we've talked about sales, we've Talked about marketing. Can you shed some light for the audience about some of those explicit roles that are using the canvas?

Alex, why don't you get started and I compliment if.

Yeah, I think the couple of roles that we see in product, whole product organization, product development, that's where we saw it scale. At MasterCard, for example, we had a webinar just recently where they trained 10% of the workforce to do this sales and marketing also very often because they want to get a better understanding of customers. So even beyond innovation, I think a lot of business people and leaders, senior or junior leaders, are looking for better tools to understand customers, to design value propositions accordingly and to design business models. Really where we see the largest scale is product management, marketing, sales, innovation obviously, but it's just not as important and established in companies today to really spread. Where we've seen it start out is more at the middle management level or people who are tasked to come up with new value propositions and business models. But it's now moving towards the head, if you want, of companies where we're seeing more and more top down initiatives. We're just working recently with the chief marketing officer of a 22 billion euro company where they're training all of their marketers to use the value proposition canvas. So they're training 1,500 people, that's the objective throughout the world, to use the value proposition canvas to make their value propositions more explicit. That came directly from the chief marketing officer. So we're seeing more and more top down initiatives. While I think the bottom up is really pretty established now with these tools. A lot of people in companies use these tools. Greg.

Yeah, I think you've covered the main roles there. I think the other thing I would add to that is that you've heard that from Alex a lot, I'm sure. But one key benefit that people see in both the business model and the value proposition canvas is that it's becoming a shared language to create value or even clarify value within organizations. When you start putting different types of people in the room, so product developers, salespeople, but also R and D, also people in finance or hr, you start seeing a lot more alignment, a lot more quickly about how we build new things, but also how we communicate about our current value proposition, our current products and services. And so I think a big, big recommendation that we always have when we run these workshops, innovation focused, or let's say incremental innovation, radical innovation, or simply trying to figure out if we can be better at talking about what we do as an Organization. One of the big things that we recommend is to bring a lot of diversity of the different roles present in the organizations, getting people to talk across silos and so on and so forth. I've never been in a workshop where the guy from finance feels out of place because they can't contribute. There's always a very powerful way of for anyone to contribute to those pictures that we want to try and create our understanding of the customer, our understanding of what we create for them, our value proposition or the entire business model.

Great.

So let's wrap it up with this one final question. And I've seen this one come up a lot. Mapping out the value proposition canvas is one thing. Execution is so much more harder. When's the right time to really start testing that hypothesis? And I think this is a question that's going to excite both of you.

Yeah. So I think we might need to clarify the word execution first. So there is the execution of the testing and then there's the execution more in terms of implementation of a proven value proposition. Right. So the thing you want to do very quickly is after you brainstorm and came up with a couple of ideas around value propositions, is you want to go towards the testing execution immediately. I'd say you have a two day workshop, maybe in the first day, after the first workshop, after thinking about customers or jobs, pains and gains, you should already be calling customers or talking to customers that same day. So the testing execution should happen immediately. And we're now working with this concept of 10 week sprints where we get teams in larger organizations, in this case to ideate in a two day workshop after they learned about the methodology before and they maybe mapped out their existing business models and value propositions. But after the ideation, they go and test immediately for 10 weeks, for eight to 10 weeks. That's a very bold thing to do because companies are more used to ideating and then writing business plans and then actually implementing without having proven. But the point is that you want to reduce the risk and uncertainty of your ideas. So the faster you go, get out of the building and test, the better. And that can be done immediately. You don't need to build something, as I pointed out before, to get evidence about the jobs, pains and gains of your customers. And that's something we need to push back on a lot of. I remember having a conversation just a couple of weeks ago where we were talking with one team and they said, oh, we're working with the design team on this prototype. It's going to take us four weeks and then we can go test it with customers. Well, in a eight to ten week process, that's half of the time. So we said, hey, that's not acceptable. You need to come back next week with customer evidence that they actually have these jobs, pains and gains, these issues that you're talking about, which will lead to a more informed design of a prototype. So execution of your testing happens immediately. And there we need to be creative. Implementation, I think is what you then have, which is much easier once you have a validated idea. Implementation is just very good project management. I think that's the easy part. Once you've validated your idea, that's the hard part. That's where organizations are still learning. I think many organizations are excellent at implementation. Where they're not yet as good at yet is executing the experiments.

Just to add to that a little bit, one of the key stories that we often share, because there is a public video out there, which I actually might not even be out there anymore, but it's this startup called owlet in the U.S. owlette is a team of students that created a baby monitor. So you place a little sock on the foot of your baby and it monitors their vital signals during the night, obviously to help parents feel at peace and being alerted if there is any trouble while the baby is sleeping. And for me, that's such a beautiful story to show to anyone who's interested in innovation, because the guys went to, first of all, on the side of studying whatever it is that they were studying, went from idea to validating their business, business model and value proposition in six months. And so it's a really interesting way of seeing that innovation can go really fast, even like it is with the case of Alet, when things like technology is involved. They had to build a whole piece of technology into this. They had to go into figuring out hurdles with regulation, the FDA in the state. They had to actually understand their customer to start with. They went to a wrong customer with the wrong product originally, and then they had to pivot away from that customer to a new one with a new product. So it's really this whole notion of execution is completely, I think, taking on a new meaning nowadays, especially when we're talking about building new things, this whole world of innovation and it can go really, really fast, even when there are things like technology and regulation and all sorts of other hurdles in place.

I like using the Owlet example. Thank you for pointing that one out, Greg. As a yardstick for executives who test their ideas, I say, hey, if these students can get to this level of validation in such a short amount of time. If you can't do that, shame on you. So I provoke them a little bit saying, hey, these students who actually master the process but have very little business experience, they can do such a good job in such a short time with so little resources, get strong validation, pivot their ideas, then people who are tasked with innovation, with product development need to do a job that's 10 times better with all the experience that they can bring in. So it's an excellent video to actually get people to learn about this process and have a yardstick, right, a benchmark. If they can't beat these guys, they're worse than students who've never done business before.

Awesome. Thanks so much guys. Holger, I'm going to take the screen back from you just to wrap up some elements of the webinar. Both Alex and Greg, thank you so much for taking the time to talk to the audience today and to share examples of value proposition design as asked by the audience. Holger, I believe you have to stop sharing your screen.

While Holger is stopping to share. I just might want to point out that Owlet is now a real business that's making millions of dollars of revenues. I happened to come across one of their suppliers. They didn't remain at the stage of testing their ideas, they iterated their ideas and now are a multimillion dollar business. So this stuff really works. And there you have one small example where the benchmark is public and a lot of other companies who do this, this stuff is just not public so it's a bit harder to share. Cool.

So to our friends in Asia and the Pacific, if you are interested in getting more in depth with Value Proposition Design and the concepts on Business model generation, Greg is actually going to be hosting a two day hands on masterclass in Hong Kong this coming June and it's a chance for you to dig deeper into the lessons, into the tools, into the methodologies directly with Greg, one of the co authors of Value Proposition Design. For more information on those dates and how to get tickets, you can go to our blog.stragizer.com on the sidebar there's a link, but I'll also shoot a link to the event page to all the attendees after this webinar session along with the recording. And lastly, once again, if you're interested in getting access to the Value Proposition canvas, the business model canvas, as well as the different tools and devices that we have in order to create those value propositions and business models go to our resource library. You simply have to create an account and you have access to, I believe, 30 plus tools, trigger questions, frameworks that can help guide the conversation and experiments that you want to run. That's it for this session. Alex and Greg, again, thank you very much, Holger. We really appreciated the visuals and look forward to hosting all of you again in our next webinar session.

Thanks, Kavi.

Thank you.

Thanks everyone.

Goodbye everybody.

Bye Bye, Sam.