Your value hypothesis is your best theory for why customers will pay for your product or service in preference to the status quo or other alternatives available to them. One of the key challenges entrepreneurs face in launching a new offering is understanding the value it offers a target customer in addressing a need or solving a problem. Our February 2017 newsletter explores the challenges of crafting and testing your value hypothesis.
February 2017 Newsletter: Crafting and Testing Your Value Hypothesis
|This blog post summarizes our February 2017 newsletter; you can subscribe to the monthly SKMurphy newsletter using the form at the right.
Crafting and testing your value hypothesis are core tasks for the successful introduction of a new product or service. This month we look at some of the challenges involved in developing your value hypothesis and testing it. The risk in taking on established competitors using their same business model and value proposition are so severe that Gordon Bell has labelled it “attacking a walled city” because it usually does not end well for an upstart without the resources for a protected effort.
Some extremely valuable insights from Tristan Kromer on clarifying and testing customer and value hypotheses. One I really like is to make sure you have a clear definition of your target customer, the “who” buying your product. Tristan suggests a “5 Who’s” exercise modeled on lean’s “5 Why’s.”
Trying to take on established competitors using their same business model and value proposition is called “attacking a walled city.” It’s important to understand what your customer is actually paying for and find some way to offer a different value proposition.
Before you introduce a new product into an existing market you need to analyze the market structure and competitive landscape. This is a laundry list of items to check for as you do your analysis
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