Friday, November 14, 2014

unCon 2014 Sessions: Start-up Secrets Unplugged with Michael Skok

By Ellen Askey

Michael presented framework for startups’ value propositions.  He outlined the four “U”s for customer needs: unworkable, unavoidable, urgent, and underserved. We explored the four “U”s in a brief case study of VSnap, with Guillame and David representing the company. They pitched VSnap as a video messaging platform for sales reps that increases close rates by 34%. Michael helped fit their case to the 4 “Us”:
  1. Unworkable - VSnap fills the gap of personal contact and body language, lost over phone sales
  2. Unavoidable - How does VSnap address unavoidable situations? Find a segment of the market where VSnap is absolutely needed
  3. Urgent – Vsnap increases close rates
  4. Underserved – no one else is doing it

Promising companies fill the four “Us” while entering a “white space” free of competing solutions; a company should strive to address the four “U”s such that the consumer can’t live without the product.

We then looked at Brendan’s start-up, which he described as a platform that changes how people engage with art and culture. Michael suggested articulate his pitch using the four “U”s, framing his platform as a pain point solution: Brendan’s startup replaces audio guides with a platform that adds visual cues and social interaction; it’s non-linear. They pitch mainly to museums and galleries. The session participants could immediately grasp the gist of Brendan’s startup and how it could bring value to its customers - museums and galleries – and end users. 

Next, Michael described a second framework for B2B companies:  solving blatant/critical needs as opposed to latent/aspirational needs. (See picture)

We then looked at Crowd Comfort, a platform for people to report facilities problems in buildings (comfort, maintenance, hazards) so the managers can respond. Eric, of Crowd Comfort, placed it in the middle of the blatant/latent spectrum and the aspirational/critical spectrums. We discussed how Crowd Comfort in fact addresses comfort as a latent need and hazards as a blatant, critical need, for a company wants to avoid lawsuits or production setbacks, and the platform could possibly save a life. The maintenance solution could serve as an ally for revenue generation. Perhaps, then, Crowd Comfort could move more towards meeting blatant/critical needs by focusing its value proposition around hazards and maintenance.

Understanding where you are in the blatant/latent and aspirational/critical framework helps refine a value proposition; it even helps with pricing and with positioning around competitors. And, identifying “whitespace” with unmet, blatant, critical needs can certainly expose auspicious venture ideas.

The discussion then shifted from B2B to consumer businesses. Michael made the point that consumer needs can be broken down in the same way as business’ ones, though solutions for latent/aspirational consumer needs can be viable. Social and security-centered needs are at the top of the hierarchy of consumer needs. Take Facebook. It began by addressing what appeared to be a latent, aspirational, need – college student’s need to meet people. Facebook addressed that need, which has sense become more blatant/critical. Calling back to VSnap, the video messaging company addresses the key need of communication, which falls under social needs.

Michael then discussed prime audiences. Would Crowd Comfort’s prime audience, with the most critical needs, be the managers or the users? Say we chose the managers; then, the users would also have to benefit, completing the loop. Thus, it’s important to deliver value to both.

The discussion then moved to disruptive technologies, like Uber. Michael mentioned that one can spot the three Ds: disruptive, defensible, and discontinuous. A disruptive idea breaks the current solution so it’s unworkable; a defensible idea can retain value; a discontinuous idea gets its value from connection (for example, smart phones only have value when connected to the cloud). Spotting these disruptive opportunities opens a new, underserved market.

We next explored the question, “Is the problem worth solving?” Michael advised asking users what specific piece of their problem is unworkable, unavoidable, urgent, and underserved. If you’re looking to build a huge company, look for an even larger problem, because you’ll never have whole market share.
By the gain/pain ratio, the gain should be at least an order of magnitude greater than the pain in order to change something. We considered a start-up described by Mugdha as an ecommerce company for children’s toys aiming to expose them to different cultures. They sell, for example, a wooden toy for $35. Initially, the pain (cost and finding the product) seemed latent and aspirational, outweighing the gain (“an immersive cultural experience,” as opposed to, say, a random library book). However, enthused participant, parents themselves, stressed the great, buried values of this product for the buyer, the parents: they feel like a better parent, raising globally-minded children; they bring a worldly experience to their child, like a study abroad program or a family trip, but at a younger age, in a box, and for significantly less cost.

In the final minutes, Michael advised that we think broadly about the costumer – here, the parent, not the child. We should try to fully understand who receives the gain and who feels the pain. Rather than trying solve your own pain/gain experience, we should talk to the parents, and we may unearth how valuable they find travel or this alternative mode of cultural immersion. Entrepreneurs tend to be optimists; Michael noted that we should try being more pessimistic to see and fix the issues with a value proposition. We should focus on the buyer and ask, “What are all the things that are wrong here?” Then, we can switch back to being the optimists to share our vision. Then, we can then unpack the value proposition and see how to get more value out of your customers.

See Michael’s site – – where he gives further details about value propositions and other topics. Be sure to check out future discussions with Michael in December and January, listed on  

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