Steve Blank’s formula to clarify the value you are serving to customers
People don’t want to buy a quarter-inch drill. They want a quarter-inch hole
When building a company you need to frame your offering in a way that makes customers excited to engage with you. There needs to be a clear rationale why customers should buy from you. Digging deeper, customers don’t buy because of your purpose or “why”, the only reason they buy from you is that you enable them to attain a given outcome. Hence, your value proposition needs to reflect this clearly.
Steve Blank, an American entrepreneur who substantially shaped the way we think about startups today, advocates for a simple formula to clarify a value proposition:
We help X do Y by doing Z
X = Who is your target customer? The more specific, the better.
Y = What is the outcome you are enabling? Or in other words, what unmet need are you addressing?
Z = How are you uniquely solving the unmet need at hand? Features go here.
This formula for a clear value proposition may feel too simplistic. However, it’s the seemingly simple questions that usually are the hardest to answer. For any person building a company or product, it is helpful to clarify your value proposition using this famous formula.
