Value Proposition Canvas

The Value Proposition Canvas is a tool used by startups to create and validate value propositions when developing their product or service.

The purpose of the Value Proposition Canvas is to help founders better understand the needs and wants of their customer base. It can be used to map out the customer segment, job to be done, different value propositions, the products/services associated with them, and the channels used to reach customers. The canvas is split into two distinct parts, the customer segment at the top and the value proposition at the bottom. The customer segment consists of the customer profile, jobs to be done and gain/pain drivers. These elements provide an understanding of the customer and help define the target customer segment. The value proposition helps to identify the value the product or service provides and the associated features and benefits.

The value proposition canvas provides a business with insights into the expectations and needs of a target consumer, allowing the business to create better align their product or service to the customers needs. In doing so, it can help to optimize customer experiences as well as increase customer acquisition and retention rates.

Consider an early stage startup that is creating a job search application. In order to understand the expectations of their target customer, they can use the Value Proposition Canvas.

In the Customer Segment part of the canvas they would start by outlining the customer profile - students graduating with a college degrees from the United States, and the Job To Be Done - helping these students find employment soon after graduating. Through further research, they might discover that the target segment's gain/pain drivers include a desire for a simple and efficient job search process and timely results.

For the Value Proposition part of the canvas, they might develop a list of features for their application, such as job postings sorted by relevance, access to career development advice, and notifications for job openings. Then they can think of the associated benefits to those features for the customer, such as saving time on an inefficient process, the resources to better prepare for interviews, and quickly getting notified of job opportunities.

Once they have determined the customer segment and value proposition, they can use the canvas to make sure they are creating an app that meets the needs of their target customer.