Tuesday, February 17, 2015

Creating a Repeatable, Sustainable, Valuable, and Predictable SaaS Business: The Value Prop at the IBM Innovation Center in Cambridge, MA with Michael Skok

Approximately 75 intrepid attendees braved freshly falling snow (again!) to join MassTLC’s Cloud Cluster and Sales & Marketing Community in their joint program, Creating a Repeatable, Sustainable, Valuable and Predictable SaaS Business: the Value Prop. This event was the first of a three-part interactive workshop series with entrepreneur and investor Michael Skok. Special thanks to our event host and MassTLC Global Sponsor IBM and Cloud Cluster sponsor CenturyLink!

Next up: The Business Model and Turning Products into Companies.

Highlights of the Value Prop workshop included:
  • Michael led attendees through his Value Prop template with help from Co-Founder and CEO George Adams of ViziApps and Co-Founder and CEO Shantanu Dhaka of Modit as case studies
  • Many companies don’t have a good idea of what their true Value Prop is
  • Understand the problem you believe you are solving before you get too excited about your idea
  • Try to solve a problem that cripples businesses - problems needing to be solved should be: Unworkable, Unavoidable, Urgent, and Underserved
  • Customers want you to solve their problem first, then make it better - avoid using “Solution,” “Faster,” “Better,” “Cheaper” in your Prop
  • Big problems are big opportunities – it takes as much energy to tackle a big market as a small market, so why not go in for the big fight?
  • Realize that when you pitch that you are asking people to change their budget and make your solution a priority

Check out Michael’s recap of the event here.

Being Agile in a Value Prop Framework – Modit Case Study

Crystallizing our Value Prop and Fundamental Benefits for Customers – ViziApps Case Study 

Complete Event Recap

Every business needs a Value Prop. Chances are that your business was based around an idea that you believed was your Value Prop. As time passed, your idea evolved, the product started to come together, and now your sales deck is a bloated, incoherent mess that only you can understand and the true Value Prop is buried or completely lost somewhere between slide 1 and 60.

According to Michael Skok’s Value Proposition template, if you can clearly and concisely answer five critical questions, you can build a successful Value Prop:
  • Who is your product for?
  • What are they dissatisfied with?
  • What is your product?
  • What is the key problem solves?
  • Why is your product is better than anything else in the space currently?

To answer those questions he suggested following a three-step process:
  • Define the problem you are solving
  • Evaluate your solution
  • Build your Value Prop.

Simple, right? However, tackling each step of the process is going to be a bit of work.

Is your product solving a real problem? What defines a real problem? A real problem can be identified by 4Us:
·         Unworkable – If this problem happens, someone loses their job or the company goes under.
·         Unavoidable – Everyone in your market will encounter a time where your solution will be beneficial.
·         Urgent – The problem is currently causing issues and the customer will be able to benefit quickly.
·         Underserved – Don’t compete in a flooded market, your resources are finite.

After you’ve defined the real problem, look back at your idea and determine the real solution. Is it a breakthrough opportunity? Look for the 3Ds - it should be Discontinuous Innovation, Defensible Technology, and have a Disruptive Business Model.

With the solution now in hand, it’s time to evaluate it. Are the client’s gains from using your product going to outweigh the pains of trying it and implementing it? Could they get by with a competitors’ cheaper product, or even without doing anything at all? If there’s not a large enough gain to pain gap (gain >10x pain) you will have a difficult time getting clients to adopt which tosses you into the unworkable problem category! Focus on disruptive innovation with non-disruptive adoption.

Now – with all these insights in mind - take another look at your Value Prop to fill in the template:
  • Who is your product for?
  • What are they dissatisfied with?
  •  What is your product?
  • What is the key problem solves?
  • Why is your product is better than anything else in the space currently?

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