Strategyzer Webinar: Value Proposition Canvas Best Practices

Broadcast is now starting. All attendees are in listen only mode. Hi everybody. Welcome to another Strat Chat webinar session. The topic today is the Value Proposition Canvas Best Practices. We're just about two minutes away from starting, so in the meantime, why don't you think about what you'd hope to learn from today's session and you can share it in the questions box or the chat box in the GoToWebinar control panel, or you can tweet it to us at Strategizer and and if you use the hashtag stratchat, we can follow along with you as well. We'll be starting in a couple of minutes. Thanks.

Sam.

All right, let's get started. Welcome everybody, and welcome to another Strapchat Strategizer webinar session. Today's topic is, of course, Value Proposition Canvas Best Practices. It's been a while since we've done this topic in particular and I'm kind of excited to be doing it today. As always, I'm your moderator Kavi Gupta and I manage content and community at Strategizer. And your host is Alex Osterwalder, co founder of Strategizer and co author of bestsellers Business Model Generation and Value Proposition Design. We've got an interesting session. Alex is going to talk for a little bit, but what we ultimately want to do is make it an expert session and Alex will do some Q and A. We'll open it up to the webinar room and hopefully we can address some best practice challenges or even share some tips in that conversation. If at any point you want to share a comment or a feedback regarding this session, you can tweet us at Strategizer. If you use the hashtag Stratchat, we can follow along. And if you want to check out more content related to this session or other Sessions, check out blog.stragizer.com youm'll also find our webinar replays there. We're doing something a little special for this session today. For those of you that don't know, or maybe you've seen it around the website or in our emails, we do have a Cloud Academy course that focuses specifically on mastering value propositions. It's an extension of the one we created on mastering business models as well. For this particular session, we're giving an exclusive offer away to attendees and let me just run through what you're going to get. The courses themselves continue on the proven methodology that we've introduced in our global best selling book Business Model Generation and now Value Proposition Design, you're going to get over 70 bite sized learning pieces across 13 lessons on six crucial topics. And you get unlimited access to a whole range of videos and over eight hours of learning content that doesn't expire. Of course, for completing the course, you get a certificate of completion which allows you to differentiate yourself and stand out as a top performer for completing the course. So what we're going to be doing for this session or for the attendees of this session is that if you purchase either the Vast String Value Proposition Design course or the Mastering Business Models course together, you can buy it separately, but you can also buy them together will give you 15% off if you purchase in the next 48 hours if you just use the coupon code July 11th VPC. I'll be sure to pass this around not only during the session, but also in the follow up email that everybody gets with the replay. And of course, if you're not satisfied, we'll give you your money back. 60 days guaranteed. That's it. No questions asked. So I'm going to pass the reins over to Alex. And Alex, while you get set up, why don't you take a moment to tell the crowd about why we chose this particular topic today.

So thank you, Cavi. The Value Proposition Canvas, I think is a. We're trying to make it a very simple tool like the Business Model canvas, but maybe it's a little bit harder than the business Small canvas. And since we've seen a couple of maybe not best practices, we thought it could be a good thing to do this in a session together.

Cool.

Okay, great. So I got my screen going, I think. Is that right?

Yep, I can see it. But before you go, I do want to launch one poll to the audience just to gauge an understanding of where everybody is with the Value Proposition Canvas. So to everybody watching or listening, and if you can access the poll, I'm going to launch it now. And the question is simple. How good are you at using the Value Proposition Canvas? You can select one of the following. Are you bad? Relatively weak? Good. Very good, or do you think you should be running the webinar? Give you back.

We could have said inexperienced. Right, but judge yourself. We'll do the same thing at the end of the webinar after we go through best practices, see if, if the your statement was accurate.

We'll do five more seconds for the poll.

Okay, excellent. I hope it's going to hold up the connection because I'm in the mountains with my co author Eve to work on the new book. So let's see how this is going to work out.

Here are the results. How good are you at using the value proposition canvas? 11% said bad, 49% said relatively weak, 33% said good, 5% said very good, and 3% said I should be running the webinar.

Okay, they can answer the questions afterwards. Let's see in the chat window. Perfect.

Great. It's back to you now.

Okay, so I just want to start with this number that I've shown in a couple of different webinars, but pretty impressive. The biggest pricing firm of the world, Simon Kutcher, they've done a study on how many new products and service innovations succeed and it turns out 72% are flops. That means they don't deliver on expectations. That is a huge number. And it's one of the reasons why we really wanted to focus on value propositions and then also testing value propositions. Because I think this number doesn't have to do with people not being smart enough. It's really around processes and tools that can help us be a lot more successful with launching new products and services. We've used these tools for now a couple of years and then what we're going to look at specifically today comes from value proposition design. So I'm going to share a couple of the mistakes I've seen in the field and don't hesitate to ask questions. We're going to have enough time to go a little bit back and forth. If good questions come up, Kavi, they can type it into the question or chat window, right?

Yep, absolutely.

Okay, so we're going to look at six things actually together. So first, just very briefly, the origins of the value proposition canvas and why we came up with it. Then we're going to go a little bit in the concept and best practices around the concept. People have questions like what's the difference between jobs to be done and gains? I'll get very hands on and very specific there. It's not a beginner session. So I'm not going to explain the value proposition canvas. We're going to dive right into the deep things there. I'll talk a little bit about fit between what you offer and what customers want or misfit. Some of the things I've seen in the field and there might be questions around this. Then things like starting points. How do I actually get started with filling out the value proposition canvas? So once you know the concepts, understand the fit a little bit well when I use it, what's a good way to get started and fill this out? Then a very important topic that people don't focus on enough is the Business Model Canvas and Value Proposition Canvas fit. You need a business model and a value proposition to succeed, but in particular, you need to understand how they work together. So I'll talk a little bit about that and I'll finish at least the part where I'm going to explain a couple of things around the topic of testing. We'll do one or two exercises that maybe some of you who are regulars in our webinars have already done with me, but that doesn't matter. It's a very short exercise. So let me start with the origins of the Value Proposition Canvas. So in the first book that we wrote, Business Model Generation, we really talked about the Business Model Canvas and beyond and how to use that. And that was really about telling the story of how you create, deliver, and capture value. That's what the Business Model Canvas does. So it's really about thinking about how you create value for your organization, and that happens to include value propositions for customers. So we thought. And when I say we, it was even me when we started using this a bit more often. And later on, we created Strategizer with Alan Smith. The idea was that people would fill out the Business Model Canvas to explain their business model, so. So how they create, deliver, and capture value. What we've seen, at least with a couple of the beginners, is that we would see business model canvases that looked like this, where the middle block, the value proposition block, was completely overloaded with sticky notes. And what we realized is that a lot of people are using the Business Model Canvas to do something which it was not designed for, to actually design, to make explicit how they're creating value for customers. But the Business Model Canvas is not good at that because the goal was never to describe the value proposition. The goal was always to describe the business model. Those are two different things. Business Model Canvas, how do you create value for the company? Create, deliver, and capture value? The Value Proposition Canvas is different. So we thought, well, okay, so if people are using that, that's a pretty strong signal. So what if we created a different tool? Not an evolution of the business Small CANV Canvas, but a tool that zooms into these boxes, the customer segment and the value proposition. So basically we asked, well, how could we get a bit more detailed around the customer? And how could we get a bit more detailed around how we create value for the customer? And the point was not to make more boxes within a box, because nine boxes is already a lot. We said, no, no, this is a different tool because it's a different job to be done. The question is how can we better describe the customer? How can we describe how we're creating value for the customer? So the job to be done is to make explicit how you're creating value for the customer. And that's how the Value Proposition Canvas was born. To make explicit or to tell the story of how you're creating value for customers with your products and services. So a completely different job to be done than the business small canvas. And of course as a business you need to get both right? How are you creating value for customers because if you don't, they won't come. And how are you creating value for your business because if you don't, you'll go bankrupt. Okay, so you need both. And then a topic that we're not going to talk about here, and it's not something that Strategizer focuses on most, is the whole world class execution and management of businesses which requires a whole other set of tools in more in the operational space. Okay, so that was a little bit of the intro into how we came up with or why we came up with the Value Proposition Canvas. And that leads us to poll two, where I'm curious about your value Proposition canvas usage.

Great. So we've launched the poll. When was the last time you used the Value Proposition canvas? And you can select one or more of the following was never last week, last month, last quarter or last year. We'll let that run for about 15 more seconds.

And I think the biggest competition to using tools like this is actually not other tools is non usage. People sometimes prefer just having a conversation rather than taking the conversations and thinking out of the heads and out of the mouths and making them explicit. We believe that it's really a lot better to make these things explicit so you can have a shared language and an explicit conversation around what you're doing.

All right, we've closed the poll. Here are the responses. So when was the last time you used the value proposition canvas? 25% said never, 17% said last week, 21% said last month, 20% said last quarter and 19% said last year.

Okay, so interesting. I hope those who put never actually know what the Value Proposition Canvas is because we're going to go into a best practices. So maybe before we dive in, let me just go back here to this slide. It's important to understand that in this particular tool which is different from the business Model canvas, the right hand side and the left hand side are different. You do not design your customer, you can understand your customer. So the circle on the right hand side is what we call the customer profile. You can understand the jobs, pains and gains of your customers. You don't design the the jobs, pains and gains. They have them or they don't. And all you can do is understand the value map on the left hand side, your value proposition. That's where you make decisions. You decide which pains and gains and jobs you actually focus on. So very important, right hand side customer profile, we can understand on the left hand side is where we make the decisions. Okay, so let's move into the value proposition concept usage. So again, right hand side customer profile, the jobs, the pains, the gains, left hand side, the value map, products and services that I have and how they create gains and how they relieve pains. So what we're going to do now is we're going to try to switch, let's hope this technically works into a couple of examples that I prepared in the Strategizer app. So let me jump here to a couple of the things that I prepared. So what I want to look at here is just the jobs to be done here. I used maybe a webinar listener or somebody who comes to a Strategizer masterclass and I put three jobs to be done. Learn a new methodology, create new value propositions, and make value propositions customers want. So quick question to the audience and maybe you can just type it into the chat window. What do you see what's missing here? So other than the fact that we could have a lot more sticky notes, is there something you can observe? We say learn a new methodology, create new value propositions, make value propositions customers want. So if you have a couple ideas of something that might be missing here, not the pains and gains, but really in jobs to be done, type it into the chat window. Not sure if you can read them out. Kavi, right?

Yep. If they come in.

Let'S see if we have those who said they could run the webinar should probably come up with a couple of answers. Now would be the moment. So imagine a person who wants to join this webinar or a customer wants to join this webinar or a masterclass. From Strategizer. We have these three. Three different jobs to be done. What's similar about them?

So one person has said that the jobs are now only functional jobs, not emotional or social.

Exactly. So that's what I wanted to hear. And given that we have hundreds and hundreds of listeners, I was hoping that somebody would come up with it. So there are different types of jobs to be done. They're functional jobs. Here we have three functional ones. Okay, I want to learn a new methodology. This is a very functional job. Oh, why do you want to do that? I need to create new value propositions in my role at my company and I really want to make value propositions that customers want. So those are very functional jobs. And in business to consumer we often think beyond functional jobs. But even in business to business we should think beyond functional jobs. So two important other types of jobs, social jobs and emotional jobs. So let me add here a additional kind of social job which might be look good with clients. That is not really a functional job. It's how you want to be perceived by others. Okay, so that's a very, very, very important job. When you are going to try to learn this new methodology, you're probably also going to do it for other reasons that purely functional. Okay, now maybe we could put an emotional job. So what could be a different emotional job here which is less about the pure functional aspect, it's less about how you're perceived by others, but it's a lot more about yourself. Okay, maybe we could put here, you know, feel confident in workshops so we could maybe argue, well, isn't that a functional job? I'm running workshops and so. But probably it's more an emotional one. Now let me take one maybe from the finance sector. So the jobs to be done sometimes of clients of a bank who, you know, want to invest their money while functional jobs would be to get a return on their savings, get a decent return would then be the gains. But what could be a social job that a banking client might have, it is look good with their friends because I'm in the best bank that only takes the wealthiest customers. Or it could be completely different, an emotional job or oh, I want the excitement of being able to invest in startups. So what's really, really important is in any case business to consumer or business to business to go beyond the functional jobs and think about social jobs and emotional jobs or supporting jobs which might be more about, you know, purchasing support, etc.

Etc.

Okay, so let me go back and quickly to different example. Actually I want to stick with this one.

First.

Another thing, let me point this out here. So let's take learn a new methodology. So in our master classes we often get people to fill out a customer profile, ask them to do that for a book reader. Okay, so a book reader might have this job of learning a new methodology. Well, the question is, is that deep enough so one thing that we often see is that people don't think far enough. Because if you're selling books or selling master classes or running online webinars, you might actually say, okay, well learning a new methodology, that's the main job to be done. But that's when you're looking at your customer through the lens of what you have to offer. You're thinking about your customers jobs simply through your solution. What you're offering, what you really want to go would want to do is go deeper. So what we often ask people is okay, you won't learn a new methodology. So can you tell me why this person wants to learn a new methodology? Well, they need to create new value propositions. We had that one. Okay, so we got, we went a little bit deeper. Why do they want to create new value propositions? Well, you know, at my company we need to make value propositions that customers want. Well, why do you want need to make value propositions that customers want? Well, let me put here growth. Okay, we need to create growth. Okay, good. Why do you need to grow at your company? Oh, well, it's actually not really just because my, because of my company. But if I create new growth at my company, I'm actually going to be able to increase my yearly bonus. Oh, so tell me why you actually want to increase your yearly bonus. Well, turns out I want to send my kids to private school. Right. So the job to be done here is all of a sudden pay kids tuition or to university or whatever you might have in mind. So that's the kind of customer profile that you want to start to generate. Don't stick to the one just to the jobs. Oops, sorry. Don't stick just to the jobs that are closest to your solution. Try to go deeper. And the way you go deeper is by asking why a couple of times until you get a full picture of at least this one particular customer. So not staying superficial. But going deeper is very important. And you could do the same thing for, you know, these social jobs or these emotional jobs. So going deep is very, very, very important. Okay, so let me switch to slightly different example here. Another thing that I prepared. This one. Understanding pains and gains. So often people ask, well, Alex isn't, you know, pains and gains just the opposite, you know, side of the coin isn't just or a continuum. Okay, well let me give you an example where that's not the case. So let's take a customer of a credit card company, let's say here's little Alex and one of the jobs to be done that I have is to pay in restaurants. Maybe I could be even more precise pay in restaurants when I go out for dinner with clients. Okay, so here one pain is, well, if the credit card doesn't work with clients, that's a real pain. Right? Anybody who's been in that situation, it doesn't matter if you have enough money on that credit card or not. You just don't look very smart. Then we can ask, well, okay, the opposite would be. Credit card works. When I go eat with clients, is that really a gain? Well, probably not. That's just what I expect. So often when people make customer profiles in the meeting room, they will have pains and gains that are just the opposite side of the coin or a continuum. But once you start talking to customers, they will tell you what is a real pain and what is a real gain. So here they'll say, well, you know what, credit cards work. When I go eat with clients, that's not a gain. I mean, that's just what I expect. Okay, so can you tell me what the real gain would be here then? Well, you know, the miles I get to pay family vacation. That is definitely a gain. So it's really important to go deeper. Oops. To go deeper than just to. Just to stick to what you have in the meeting room by asking your customers, what are the real pains and gains. So in the meeting room, theoretical, you will often get the opposite. When you talk to real customers, they can tell you what's the pain and what's the gain. So don't waste time and try to get out of the building pretty quickly. Okay, let me go to a slightly different example here. Jobs and gains. So a big question that we often hear is, Alex, isn't, you know, jobs and gains often the same thing? So here, for example, a master class participant or webinar participant might say, well, one of my jobs to be done is understand the latest trends. Okay, well, good. Then the gain is I understand the latest trends. Huh? Is that really the case? Well, that's not good enough. That's not deep enough. So you could hear very well. Put. One of the jobs to be done of your customers is to understand the latest trends. But in the gains, you'd have to be a lot more specific. So what you could do is when you talk to that particular customer, you will ask, okay, how do you know if you understand the latest trends? So what if I said, here, so I'm going to change this. It's actually really about clients. I don't care that much about just understanding the latest trends. But I believe I understand the latest trends when clients start to come to me with trend questions. Right. That's how I measure success of this particular aspect. Oh, how else do you really know if you understand the latest trends? Oh, well, when you know, not being behind on Twitter. So that's a way I look at understanding the latest trends. If I see stuff going on in my Twitter feed and I already know about it, then I really believe I've been successful in understanding the latest trends. I was, you know, before all of my people that I follow on my Twitter feed. So what you put here in gains, the outcomes that customers hope to get from a job well done. Okay, so I like calling this outcomes or how they measure success. How do they know they've done this particular job here? Understanding the latest trends. Well, so how do they measure success? And what are the exact outcomes that they hope to achieve? So it's very important to be, again, not just superficial. Understand latest trends. Oh, yeah. Understand latest trends. That's the gain. No, no, no. How do you know that? And what do you really want to achieve? So maybe the outcome is. Oh, well, what I really want from understanding the latest trends is new client engagements, because they will come to me if I understand the latest trends. So all of a sudden, in that conversation, you'll get the real gains that somebody wants to get out of understanding the latest trends. So again, going deep, extremely important. Okay, so last one here. What I would like to point out is that one more on the right hand side that often we forget is to be more quantitative. I'll come back to that one, but I want to. Since I've been talking for quite a bit now, I'd love Cavi to launch the next poll before we move on.

Cool. It's up. So, to everybody who's watching, how often have you used the value proposition canvas? You can select never. A handful of times, a dozen times, or more than a dozen times. I'll run it for about another 15 to 20 seconds. A few more seconds. All right, I'm going to close the poll now if I can. Show the results. All right, so how often have you used the value proposition canvas? 24% said never. 59% said a handful of times, 8% said a dozen times. 9% said more than a dozen times.

Okay, excellent. So I can see a couple of people who have a little bit of experience with it. So I do hope this best practice session will help a little bit with getting even better at this. So another topic that we see a lot is this whole idea that people are not always quantitative enough when it comes to the customer profile. So you can see I'm focusing a lot of my best practice session here for the moment on the customer profile. So typically, one of the things that we might have. In a customer profile is a job to be done like shopping for groceries, for food, something like that. And then you ask, well, what are the pains related to shopping for food that you might have? Well, I hate waiting in line. Okay, so good. Then what are some of the gains? Well, I really like fast checkout. Okay, so you could go on with this and then you get a pretty nice kind of customer profile. Something that I miss in these kinds of customer profiles, even if you have quite a few pains and gains, is that they're not quantitative enough. And the problem is that when you just have waiting in line or fast checkout, you know, that is very relative. Well, for some people, waiting in line, one minute is a huge pain. For other people, you know, after 10 minutes, that's when it starts to become a pain. So when you start filling out a customer profile, what I ask people to do is immediately put a number waiting in line for more than 10 minutes. Okay, definitely a pain. Now people ask me, I remember doing this at MasterCard and the people in the workshop were saying, well, we don't know. Why are you insisting that we put a number there? And I said, well, that's exactly why I'm insisting, because you don't know. But once you have a number there, other people in your company are going, going to ask, how do you know it's 10 minutes? So that's almost going to force you to get out of the building and to verify what kind of number that you have there. So that's important, number one. So you put numbers there. But even more important, why do I actually want you to put numbers there? Is because otherwise you can't measure if you're creating value. If you say, you know, okay, I just decreased waiting time at my store by five minutes to 12 minutes. Well, it's still a pain for the customer. So while we're always very good at being quantitative on the left hand side, faster processor, better design, etc. And how much faster and all those things, what we're doing really not very good at, and what I see way too often is people don't put numbers in the left hand side. Okay, let me jump back quickly to the slides here. We already did our poll three. I'm actually going to skip this one. It's more of an experience Sharing. And I'm going to go to the starting points. So here I'm going to try to switch. And in that, while I'm switching Cavie, are there already some questions coming in just to know on the channel? So far?

Yep. One of the ones I think we've seen a lot, Alex, with the companies we work with, but it's also coming from the audience is, you know, the idea of creating a value proposition canvas or a customer profile for each customer segment. Or can you just address an entire business and use that as a customer segment? So I'm guessing this is a B2B question.

Okay. So I threw myself a curveball by asking that because that's later in the slides. But since the question came up now, I'm actually going to go there right away and I'm going to take a particular example. So sorry that we're switching back. I didn't expect this one. So I'm just quickly going to go back to strategize because I prepared an example for this question which comes up a lot. Now, obviously I have my iPad in front of. Let me see. Go here. So it's a very good question. Huh? We don't have. Here we go.

Okay.

So here I prepared a business model canvas for a company. Let me put it the other way around. Maybe start with something else going back. Sorry.

So.

Let me go back to the slide. So. And then get to the. To the example I want to show you. So I don't like it when people put an enterprise as a customer. And the reason is very simple, because you never sell. Didn't show up. Sorry. You never sell to a company. You sell to customers and users in a company. So if you're Microsoft and you're selling Microsoft Windows, which they've now been doing for a very long time. Well, your customers is not other companies. Your customers are users. Those who use, are they going to pay? No, no, no. Those are the economic buyers. That's the purchasing department. Oh, okay. So the purchasing department. But who actually makes a decision on the buying? Well, that might be the decision maker, but there are also people who influence that decision or recommend which solution to buy, which might even be a consulting firm. So at the end of the day, you really need to have a value proposition for each one of these different customer or user types. And I took this little diagram from Steve Blank and Bob Dorff in the Startup Owner's Manual where they make explicit that you don't actually sell to companies. You sell to different users and customers and clients. And in A company. And what they added is also the saboteurs, those people in companies who might not have a direct stake in the purchasing decision, but might undermine the purchase. Something we see often in B2B. Now let's see if anybody figures this out in the chat window. Type it into the window and Kavi will read out the answers. Where else do we see this other than in B2B? This kind of unbundling of the customer that we need to think of more than one customer. So we don't sell to enterprises, we sell to different customer user types. Where else does this apply other than in Enterprise and B2B? If anybody finds it out, Anything coming.

Up, Kavi, one person has said families or households.

Exactly. That's the one I wanted you to think of. So typically if, you know, let's take Nintendo or Sony or Microsoft selling their game consoles, they don't actually sell to families and they probably don't sell to kids, maybe to young adults who have the money. But if they sell to young kids, they're actually probably selling to different user and customer types in a family. So for a game console, it's very clear the user is always the dad, the influencer, are the kids, the economic buyer. I won't get into anything that will cost me. I'll be careful there. Usually the mother and decision maker, the mother or the father. But we have to unbundle there the different customer end user types, they're starting to kind of get off track here with trying to avoid any kind of political incorrectness. Okay, so I think that would answer the question. Now I'd like to make here the connection back to. And this is here we're actually in topic. See in Topic 5 for a second, which is about the business model canvas, connection with the value proposition canvas. And here I want to go quickly to Strategizer to jump over for this example that I prepared. But now I'm not sure if I'm showing the right screen. We go, nope.

So we're seeing your iPad, but it's overlaid. Underneath it is the app.

And okay, so the example I would like to talk about, which I quickly started before but made more sense to start with the other topic is that a company called sca, Swedish company, biggest manufacturer of hygiene projects products. Sorry for the misspelling there. Hygiene products for consumers, but also for buildings. So business to business. So I've seen this canvas when I was working with the teams there on a wall where they had one sticky note for value proposition canvas and they had three sticky notes for the customer segments, bathroom users and buildings. Okay, so they make hygiene products, means toilet paper installations, soap dispensers, etc. So then they said, well, we have three customer segments. Bathroom users, facilities managers, and resellers. And seeing that from across the room, I immediately thought, oops, something's going wrong there. So let's see if anybody of you can see the mistake in this particular business model canvas. What's wrong here in relationship to the value proposition? Value propositions. Kavi, read it out if you see the answer. So so far, somebody has always found the answer of our almost thousand listeners. I'm trying anybody come up with the answer. What's the problem here? Nobody. Nothing.

Nobody.

Okay. So I walked over to this team and then asked them, well, okay, so you're telling me you have three different customer segments, and it's the same value proposition for each one of them? They say, yeah, well, Alex, can't you see? That's what we put there. We put them the sticky notes there. I said, okay, okay, okay. So let's look at this differently. What are the jobs to be done of bathroom users? Oh, so, well, they go to the bathroom, they want to wash their hands, they want to stay healthy, et cetera. Okay, good, good, good. Okay. So that's their job to be done. What about facilities managers? What is their job to be done? Oh, completely different. Completely different. Their job to be done is to, you know, refill the soap and the toilet paper, restock, and obviously to keep the cost as low as possible. Okay, okay. What about this third customer segment, the resellers? Oh, yeah, that's again, completely different. Of course, the resellers, they just want to make as much money as they can. Okay, so you just told me three different customer segments, three substantially different jobs to be done. And your value proposition, how you create value is exactly the same thing. So what they realized immediately is hygiene products for buildings is not a value proposition. It's the product. Right. So we could almost put that here in the key resources, and we could, you know, put something like stay healthy or whatever else we would want to put there. Efficient, you know, hand washing or quick, quick drying of hands. Facilities managers, you know, here we put manage stock, stock and cost. Okay, different value proposition. And for the third one here, for the resellers, we will put make money. So immediately, you can see here what happened in terms of best practices. People didn't realize, well, at this level, while they get it right at the value proposition canvas level, because there you're forced to make the difference. These Are three different value propositions for three different customer segments. Very important to understand. And you won't always see this at the business model canvas level, but you should see this at the value proposition canvas level. So that brings me back to my slides very quickly. We can show this. Okay, so there is a very strong connection always between the business model canvas and the value proposition canvas. So let's try this a slightly different way and see again if you can understand this connection. Well, let's look at value propositions in intermediary models where you sell to the market through an intermediary. Oops. So it didn't come up. Slide I wanted to show you here. Okay, so let's say you're a publisher like Wiley. Wiley publishes amazing books like Business Model Generation or Value Proposition Design. What if you sell, you know, you're Wiley, you sell books to readers through channels, retailers like Amazon, etc. And you make money from book sales. Okay, what is wrong around the value proposition in customers? The way I told you this story so far. So again, think value propositions. What did I tell you was wrong here? And then I'll get to the best practices with the value proposition canvas. See if anybody can figure out what is wrong in the way I map this out in terms of customer segments and value propositions and making money. Cavie, read it out if anybody came up with the answer.

One person says, is making money a real value proposition? No.

No. So we have books there and of course, books. Books per se is probably entertaining books. I could put to make it look a little bit more like a value proposition.

Not precise enough. Impossible to find the value proposition.

Could be. Yeah, could be. So I would define that. Again, if I say entertaining books. I'm close enough. I would define the details on the value proposition. So there's a much bigger mistake here, and this is very important to understand. This was completely wrong the way I mapped it out. So Wiley doesn't sell to readers, they actually sell to retailers. And retailers. What are retailers interested in? They don't care about the books per se, they care about books that sell. And Wiley the publisher sells books that sell to retailers like Amazon through a salesforce, and that's where they earn money. Okay, so what about the readers? Don't they have to create value for readers? Yes, but they don't sell directly to them indirectly. So basically we still have books or entertaining books or books that make you smarter that Wiley sells to readers through retailers. So what's important to understand is when you're not selling directly to the Market, your intermediary is actually your customer and you have a value proposition to customers. So if you take Nestle makes yogurts or any kind of, you know, snack maker or so same model, Nestle makes yogurts and sells them to the end customer, the consumer, through retailers. So their real customer that they sell to with the salesforce is actually the retailer. So what does that mean for our best practices with the value proposition canvas? It means that we need to have a value proposition to the end customers and we need to have a value proposition to the intermediaries. And this business model only works if I have a value proposition to both. So in terms of business model and value proposition best practices, people often focus on one value proposition, forgetting that there are other value propositions in their business model that are just as important. So it's a little bit like the question, well, okay, do I sell to enterprises? No, you sell to several customers in the enterprise. Here different. Do I sell only to consumers? No, you sell to retailers as well. So something similar we can see in value propositions in platform models. So if you have a multi sided platform, same thing. So let's take Airbnb. Airbnb has two customer segments, Travelers and hosts, and a value proposition to each. So for the travelers there's a value proposition that we could explain explicitly and to the hosts there is a value proposition that we can explain explicitly and we need both in a double sided market like this, in a platform model to make it work. Okay, so that was a little bit for the business model fit. And I'll just show you one more thing that I haven't shown here in terms of business model fit. One more thing that I want you to understand the connection between business small canvas and value proposition. Canvas is important. If you change your value proposition, it's going to change your business model. So then often people ask, well, in the process, do I start with the value proposition or the business model? It doesn't matter because you're basically iterating between both. You change your value proposition. Maybe you have to change something in your key resources or the way you sell. You sell to a new customer, a new value proposition. Oh, probably you're going to have to change your business model as well. A good example of that is that we like to use is the company Hilti that makes machine tools or used to make just machine tools for builders. That old manufacturing business model that expired. They came up with a new value proposition in the value proposition canvas, which was more service oriented but obviously moving towards services, moving away from just selling products had a huge impact than on the business model. So you want to integrate that second loop like my slides just broke down. Nope, here we go. That changes the business model. So sorry, that was a bit fast because the animation broke down. You change the value proposition, that will have an impact on the business model. So you always need to think of both. Navigating between both business model canvases and value proposition canvas. Okay, so let me jump back since we didn't actually start talk about the starting points and I do quickly want to get into that because we often have questions around that and maybe we have one or two more minutes for whoops, sorry for that. For questions. So often when people start mapping out a customer profile, they ask, well, do we first need to do just kind of brainstorming of all of these jobs to be done? And then we take each job and come up with some gains and we come up with some pains. Is that the right way to do it? Or even differently? Should I start with one job to be done, ask what are the pains related to that? Then ask, what are the gains related to that? Maybe I come up with more here. Start making them quantitative or not. Which one's the right way of doing it? Or could I even take a third way where I don't think about the connections at all and I just say, oh, here I just brainstorm wildly left and right with the team coming up with either. Frankly, it's just a matter of preference. You can start like this, systematically, one after the other. You could come up with a couple of jobs and then move to pains and gains. Or you could just wildly brainstorm and then maybe even go back to another mode. At the end of the day, it doesn't really matter. You just need to fill out that customer profile and then get out of the building. In any case, to go and start test that. From best practice, we see that it can actually take up to 45 minutes to make a good customer profile. And then only would I move to asking, how are you creating value with your value proposition? With your value map with the products and services and how they address some of the pains and gains. So big one here that we kind of skip that misfit part. What's important often is people do this exercise. They come up with jobs, pains and gains. Good, they've done that. Maybe they even go and test it and then they come up with products and services, pain relievers and gain creators. But what they've never done is draw the connection between which pains and gains are you actually Addressing. And another question that often comes up, can a pain reliever also create gains? Yes, for sure. But what's important is that we make this connection, this fit. We make this fit between what you're offering and what the customer actually cares about. We make that explicit. Another important aspect to this is that here you will have many sticky notes because it's really about a deep understanding of the customer understanding. On the left hand side, you have few sticky notes because it's all about choices. It's about making explicit which jobs, pains and gains do you actually focus on, really about being very precise, because the best value propositions, they address few jobs, pains and gains, but they do that extremely well. Okay, I think I'm going to stop here. We went through a couple of things, probably more. If there are more questions, we can definitely also maybe do a blog post on this. Kavi, any other questions that came up?

Yep, we definitely have some. I think one of the ones that I'm seeing frequently in the questions box is if you have any insights into how long it takes to get deep with a customer on jobs, pains and gains. You know, how much is too much and how much can you end up becoming lost in just applying stickies all the time.

Yeah. So I would almost start differently and say, you know what, what if you first came up in the meeting room with a rough idea of how you want to create value for customers. You have an idea here for a product and service or bundle of products and services, and you figured out that could be interesting because I'm addressing these jobs, pains and gains. Okay, the next thing you ask is, here we're getting into testing. Okay, so for this value proposition to work, what needs to be true for this value proposition to actually work? And first you would ask yourself which jobs, pains and gains really matter for this value proposition to work. And that will basically give you the hypothesis that you should be testing. So I don't think it's a good idea to go to customers and just talk to try to figure out all jobs, pains and gains. You should have this starting point, some rough idea around jobs, pains and gains that allows you to go into the customer interview and start validating from the jobs, pains and gains that you thought might be there and would be important for you to be able to launch your value proposition. So an hour is usually what you get if you have more time from customers, fine. Usually you get even less depending on the kind of context and type of customer. So you want to use that time extremely well. And I've seen way Too many people go into customer interviews without knowing exactly which hypothesis to test. Now, you might be completely wrong. And after five interviews, you say, well, that didn't work out. It was all wrong. But that's okay. You learned. But you should never go unprepared without an idea of what you hope to learn. You should always go into a customer interview with a series of most important, most critical hypotheses that you want to test. So rather than asking, how deep do you want to go on jobs, pains, and gains is, which areas do you need to explore most? Because that needs to be true for an idea to work. So I'd say you usually get 30 to 60 minutes. Use that very well. Too many people get lost in things that don't matter. Or they ask people about opinions rather than concrete facts.

Cool. Let's do one last one, then we'll start winding it down. I think the audience is curious to know, what's one of your favorite ways to gather jobs, pains, and gains on the value proposition canvas?

So to gather them, well, first just kind of get them out there in the meeting room. But then, you know, doing an interview and figuring out, okay, which jobs, pains, and gains actually really exist. That's step number one. You know, are they true? Do they exist in the real world? Oh, this one didn't exist. This one exists. This one didn't exist. This one exists. Fine. That's the first thing. But then what I really like is, as a next step, and this is something people don't do enough is, okay, you had five sticky notes here, or five things that actually you just realized customers really have those jobs, pains, and gains. Well, that doesn't mean you understand which ones are really important. So what I really like to do is once we figured out which jobs, pains, and gains customers really have, is to use card sorting. And we have a blog post around card sorts. If you Google card sort, maybe Kavi can post that later in the email as well. I give customers cards, a card deck with visuals of the job's pains and gains, and then ask them to prioritize those and put the most important on top and the least important at the bottom. And then you start to see pattern. When you do that with 10, 20, 50 customers, and you can have conversations so you don't, you know, the end of the day, the conversation is important. But what we really need to do is get to a prioritization in the customer's eyes. Because often I see customer profiles where there's no understanding of, okay, what are the most important jobs what are the biggest pains and what are the biggest gains? People don't always have an understanding of that and then obviously it's very hard to make choices around your value proposition. Awesome.

Thanks so much Alex. We are running out of time now so I'm going to wind things down. Alex, of course, thank you for running another session with us. And to everybody who's watching or listening, we will provide a recording after this session. You'll find it in your inbox within 24 hours and I'll also be sure to share select blog posts that were mentioned in this talk today and also the link to the exclusive offer to our Master's Bundle or the Mastering Value Proposition design course we're going to sign off for now. Good evening from my side of the world and good afternoon or good morning from wherever else you are. Thank you for joining us. Alex. Thank you.

Thanks Gabby. Have a good one everybody.