This document discusses building a compelling value proposition for startups. It provides a template for crafting a value proposition that identifies the target customers, their problem or dissatisfaction with current alternatives, and how the new product or service provides a solution. As a case example, it outlines the value proposition for Diagnostics For All (DFA), a diagnostic technology company that aims to provide low-cost, easy-to-use point-of-care diagnostics for those in developing countries who currently have limited access to healthcare. It shows how DFA addresses significant needs and pain points for its customers while requiring minimal training, infrastructure, or costs compared to alternative options or no solution.

1. Hi
Harvard innovation : Michael J Skok : Startup Secrets : Value Proposition
Harvard innovation lab lab
@mjskok
STARTUP
SECRETS
Case Example: DFA
An insider’s guide to unfair competitive advantage
Building a Compelling
Value Proposition
MICHAEL J SKOK
North Bridge Venture Partners
twitter: @mjskok mjskok.com
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2. Hi
Harvard innovation lab : Michael J Skok : Startup Secrets : Value Proposition
@mjskok
Value Proposition Template
• For (target customers)
• Who are dissatisfied with (the current
alternative)
• Our product is a (new product)
• That provides (key problem-solving
capability)
• Unlike (the product alternative)
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3. Hi
Harvard innovation lab : Michael J Skok : Startup Secrets : Value Proposition
@mjskok
Diagnostics For All (DFA)
• For those in the developing world
• Who are dissatisfied with limited access to
diagnosis
• Our product is a patterned paper-based
diagnostic technology
• That provides low-cost, easy-to-use, point-ofcare diagnostics
• Unlike no diagnosis
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4. Hi
Harvard innovation lab : Michael J Skok : Startup Secrets : Value Proposition
@mjskok
Qualitative evaluation
Before
After
Vitamin vs. Penicillin
Acute Pain

Absolute Joy

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5. Hi
Harvard innovation lab : Michael J Skok : Startup Secrets : Value Proposition
@mjskok
DFA
Before
After
53%
of Rwandan women
cannot afford healthcare
26%
of Rwandan women
live too far from a hospital
Need
[1] National Institute of Statistics of Rwanda (NISR) [Rwanda], Ministry of Health (MOH)
[Rwanda] http://www.measuredhs.com/publications/publication-fr259-dhs-final-reports.cfm
Point-of-care
Minimal training required
Cost = 1¢
Diagnosis by telemedicine
Solution
Image: http://www.trust.org/alertnet/news/alertnets-top-20-big-ideas-that-dontcost-the-earth/
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6. Hi
Harvard innovation lab : Michael J Skok : Startup Secrets : Value Proposition
@mjskok
Gain/Pain ratio
•
•
•
•
•
•
•
Revenue
Cost savings
Time
People
Competitive advantage
Reputation
Etc..
•
•
•
•
•
•
Inertia
Switching costs?
Default = do nothing
Alternatives?
Good enough =
good enough!
RISK on a startup
•
•
•
•
•
•
Find (See)
Try
Buy
Implement
Deploy
Own – eg TCO
Pain
Inertia,
RISK
Gain
>10
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7. Hi
Harvard innovation lab : Michael J Skok : Startup Secrets : Value Proposition
@mjskok
DFA Gain / Pain
•
•
•
•
NO current solution => huge
NO infrastructure required
NO training required
NO time required
• Customers Gain/Pain ratio = ∞
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8. Hi
Harvard innovation lab : Michael J Skok : Startup Secrets : Value Proposition
@mjskok
DFA Example
At-risk pregnancy
Liver function
• 8 million affected globally
• conducting ~700 person
trial in Vietnam
• test for ALT/AST enzymes
• cost: $14 v. 1¢ (DFA)
Child nutrition
Small farmer support
Customer ‘pain’ is real pain
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9. Hi
Harvard innovation : Michael J Skok : Startup Secrets : Value Proposition
Harvard innovation lab lab
@mjskok
START UP
SECRETS
Case Example: DFA
An insider’s guide to unfair competitive advantage
Building a Compelling
Value Proposition
MICHAEL J SKOK
North Bridge Venture Partners
mjskok.com
twitter: @mjskok
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