Building Success - How to Develop a Compelling Value Proposition

Building Success –
Value Proposition
14th January 2020
#WomenInnovate

©KTN All rights reserved. | www.ktn-uk.org January 20 2
Women in Innovation
Value Proposition
Emma Fadlon, KTN
January 2020

Workshop
1. Setting the Scene
2. Value Proposition
3. Tools to build a Value Proposition

Perspectives
Investor or
collaborator?

This is a Sales
Process
We are selling an opportunity
to invest in a vision

• What is your commercial
objective?
• What is your strategic
objective?
• What outcomes are you
aiming for?
What is it you are selling?

• Where is your technology
now!
• Where was it 2-3 years ago?
• What do you want it to look
like in 2-5-10 years?
Setting the Scene

Develop the starting value proposition
• What technologies do you have?
• What is the product, and who wants
to buy it?
• Scope the market
• Establish a starting operational plan
• Identify the core team, who is going
to run the company?
Your Starting Point

Value Proposition
Understand your
target audience and
the value of your
products/services

Value Proposition
Value of the pain you alleviate

The Problem
Technology led companies often fall into the trap of describing their technology and
NOT the problems it solves e.g.
• how it will add value to the customer and
• is better than the competition
However, to secure investment you need to convince investors that not only will a
customer buy your product or service but that your business can grow and scale.

Why is it important?
IT IS THE CORE OF YOUR COMPETITIVE ADVANTAGE
• Identifies benefits to the customer
• Links those benefits to a value offering
• Differentiates you from the competition
• Helps position yourself in the competitor landscape
It is how you convert a customer to your new product and or service

What is the first statement on your webpage?
• What does it say about what your value add?
• Is it a slogan? Is it a positioning statement?
Or
Does it EXPLAIN how your products solve a
problem or improves a business?
• What can your customers expect?
• How are you different?
Impact

How can this be monitised by your
customers?
• It will be different for each stakeholder
• Depending on the problem that you are
solving and the needs and issues within
that business process
What is the value of the
problem you solve?

What Makes People Buy?
Gains:
Improvement to business
process and income/cost
Inertia (10x):
Ease & cost of change
Pains:
Size of the problem and
impact

Why it is important to spend time
on this?
• This is how you persuade someone that what
you have is special and that you are better
than what is out there or what they are
currently using
• Competition is not just other
companies/technologies but changing
existing processes
• What is the cheapest solution –
do nothing!

Compelling and
clear
Relatable results &
outcomes
Clear benefits
Real value Prioritised points of
difference to alternatives
Language matched to
the audience
Communication is hard!
Persuasive Value Proposition Pitch
1 2 3
4 5 6

Tools

What is a Value Proposition?
1. Definition
2. 5 Level Value Proposition
3. Develop your 5 level Value Proposition
4. Other Tools
5. How to use your value proposition
1
2
3
4
5

The value proposition is what benefits you
offer your [customers] at what relative price
 How you will create value for your [customer]
 Framework around how to design products
and services for your [customers]
Definition of a Value Proposition

What it is NOT!
An elevator pitch might
include the value proposition
but not in so many words;
and it doesn't have to
It is not an elevator pitch
which is a very short verbal
description of your company

Five level Value Proposition
1. Who are you
2. What do you do
3. How do you do it
Then by customer, investor, stakeholder
1. What is the benefit to the
individual/company
2. What is the benefit to the wider
stakeholders
1
2
3
4
5

1. Who are you
2. What do you do
3. How do you do it
individual/company
stakeholders
1
2
3
4
5

Who are you?
How do you describe yourself?

Communication
Be creative don’t use the most obvious descriptions
Questions to ask yourself:-
• What is the world like without your technology?
• What would you, the team, stakeholders and clients miss if you did not exist -
“company values”
• What would the world miss if your company did not exist - “how will you make a
difference”
Tools
Who you are - Values

What pain do you
alleviate?
Describe yourself…

What you do
Describe the problems you
solve…

List the problems
Discuss:
• How might you solve that problem
• Not just the most obvious solution
Selecting each customer problem
• Describe what you do in a sentence
What do you do?

Validation
Don’t forget to think about:
1. How would you test these?
• Is it a real problem for that customer?
• Is it a real problem to their stakeholders?
2. The cost of adoption:
• What is the cost to the business?
• What is the cost to their end-users and
customers?
• Do you need to provide a turn key
solution?
What do you do?
1
2

How
Describe the technology
or business

List the technologies you offer
List the components of your technology:
• What is/are the core component/s?
• How do you describe that simply
Describe your technology in a sentence…
How

1. Who are you
2. What do you do
3. How do you do it
individual/company
stakeholders
1
2
3
4
5

Benefits
Describe the value to
your customer and their
stakeholders

What are the needs and issues in the market place?
How does each feature and benefit of your solution solve the problem?
Levels 4 & 5
What are the benefits?

Levels 4 & 5
Choosing each stakeholder’s problem:-
Write 2 sentences to describe the “value” of
your technology to their customer and the
end user.
Repeat for each commercial opportunity or
segment…
What are the benefits?

“VALUE”
By increasing the number of
drugs entering your pipeline
and removing the regulatory
affairs administration
We will simplify your
financial planning
Example Customer: Head of R&D
Value Proposition
Pharma Co is a novel drug
solubility formulation
technology based on modified
fruit sugars
...that provides pre-clinical
research and development
services.

1. FOR target customers
2. WHO ARE DISSATISFIED WITH the current alternative
3. OUR PRODUCT IS A new product
4. THAT PROVIDES key problem solving capability
5. UNLIKE the product alternative
Harvard Innovation Lab (startupsecrets.com)
Skok Model
1
2
3
4
5

Example Customer: Head of R&D
Skok Model
FOR: drug discovery and generic manufacture companies globally
WHO ARE DISSATISFIED WITH: limited access to novel drug formulation
technologies and slow contract research service
OUR PRODUCT IS A: unique sugar based formulation and manufacturing
technology that has been approved for human and veterinary use
THAT PROVIDES: high quality fast screening and evaluation of new drug
formulations
UNLIKE: SugarChem our technology combines high throughput and drug
manufacturing capabilities and has been proven in a wider range of NCE
classes
1
2
3
4
5

Other Tools
Value Proposition Canvas
http://www.businessmodelgeneration.com/
canvas/vpc
https://strategyzer.com/canvas
On line examples & resources
http://conversionxl.com/value-proposition-
examples-how-to-create/

…Business Model
Where does it fit into your…

Value Proposition Canvas
Source: Strategyzer

Communication
Strategy
Corporate Presentations

What are you trying to say?
 Pictures and images can have far
more meaning than words
What words will you use?
 Avoid clichés
Can you put it more shortly?
 What words can you use?
How do you make it original?

 Investors
 Funders
 Partners
 Staff
 Suppliers/Distributors
Stakeholders will have different needs
and issues so modify Levels 4 & 5 to
the audience
How do you use this in your
communication strategy?

What an investor will look for
You need to prove that:
 You have a scalable business
 You understand your customers needs
 Your product is designed to meet those
needs
 You know how to reach your customers
Summary

Define the problem:
what ideas do you have for
solutions and why (urgency/
underserved/critical)
Evaluate:
What are the gains of your
solution versus the pain
(evidence and qualification)
Build:
Build the value proposition for
each target customer or sector
(traction and scalability)
The three steps
How to make a value proposition
1 2 3

Understand your
audience
Cost of adoption Specific benefits Stand out from the
competition
Communication Clear & concise
message
Presentation
To developing a convincing and compelling case
What are the key factors?
1 2 3 4
5 6 7

Is it necessary?
Quite simply:
If you want
customers to buy
– they need to
know why!
Customers need to understand, and be
convinced by, the benefits of the
product/service being sold.

Is it really
necessary?
If you want
investors to
invest– they need
to know why!
Potential investors need to understand,
and be convinced by, the benefits of the
product/service and the business plan.

What you should
end up with
A simple statement
or phrasing that
sums up what you do
in a way that engages
your users.

Any questions:
emma.fadlon@ktn-uk.org
Thank You

Newsletter: https://ktn-uk.co.uk/newsletter
Online Community: www.worldlabs.org/womenininnovation
Email: siwan.smith@ktn-uk.org
#WomenInnovate

Building Success - How to Develop a Compelling Value Proposition

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