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Value Proposition Design

How to Create Products and Services Customers Want

By Alexander Osterwalder, Yves Pigneur, Greg Bernarda, Alan Smith, Trish Papadakos
12-minute read
Audio available
Value Proposition Design: How to Create Products and Services Customers Want by Alexander Osterwalder, Yves Pigneur, Greg Bernarda, Alan Smith, Trish Papadakos

Value Proposition Design (2014) is a comprehensive guide to designing compelling products and services. Real value comes from empathizing with customers to find out what everyday jobs and tasks they need help with. However, coming up a product that helps customers complete these jobs and tasks is only the beginning.

  • Aspiring or current entrepreneurs
  • Anyone interested in innovation and value creation

Alexander Osterwalder, an entrepreneur and respected keynote speaker, is a co-founder of the company Strategyzer, which offers a platform and services to create superior products and businesses.

Yves Pigneur is a Belgian computer scientist who specializes in management information systems.

Greg Bernarda is a popular speaker on innovation and strategy; he is currently an advisor for the consulting firm Utopies.

Alan Smith is a designer and entrepreneur. He is also a co-founder of Strategyzer, where he creates tools to help people design better businesses.

Trish Papadakos is a photographer and designer who has been at the forefront of many successful businesses. She teaches design at Central St. Martins in London.

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Value Proposition Design

How to Create Products and Services Customers Want

By Alexander Osterwalder, Yves Pigneur, Greg Bernarda, Alan Smith, Trish Papadakos
  • Read in 12 minutes
  • Audio & text available
  • Contains 7 key ideas
Value Proposition Design: How to Create Products and Services Customers Want by Alexander Osterwalder, Yves Pigneur, Greg Bernarda, Alan Smith, Trish Papadakos
Synopsis

Value Proposition Design (2014) is a comprehensive guide to designing compelling products and services. Real value comes from empathizing with customers to find out what everyday jobs and tasks they need help with. However, coming up a product that helps customers complete these jobs and tasks is only the beginning.

Key idea 1 of 7

To identify value, put yourself in your customers’ shoes and recognize the pains and gains of their jobs.

If you want to sell something, be it cupcakes, computers or cars, you have to ask yourself one important question: What makes my product valuable to a customer?

To figure this out, you first need to understand the jobs your potential customers need help with.

A “job” is any task a customer performs on a regular basis. There are two kinds: functional jobs and social jobs.

Functional jobs are specific things customers need to get done, such as tending to the garden or buying groceries.

Social jobs are the things customers want to do in order to impress others, such as buying a trendy outfit or wowing their boss with an amazing presentation.

The next step in identifying value is understanding customer pains: the things in life that stand in the way of a customer performing a functional or social job.

The first customer pain is unwanted outcomes, which is when a customer doesn’t get the outcome he was after.

Maybe the customer bought a garden sprinkler that turned out to be useless or worked on a presentation that put everyone to sleep – both examples are unwanted outcomes.

The second customer pain is obstacles, which prevent the customer from even starting a job.

Maybe that coveted sprinkler system is just too expensive; or maybe the customer simply doesn’t have the time to prepare a satisfactory presentation.

The last customer pain is risks – the unpleasant things that happen when a job goes unperformed.

Without a sprinkler system, for instance, your customer’s garden might die; and if that customer doesn’t nail the presentation, she won’t get a promotion.

The final step in determining value is recognizing the three types of customer gains: the things customers are hoping to get.

The first is required gains, which is the basic function of a product. The required gain of a sprinkler is that the plants get watered.

The second is expected gains. Customers expect a sprinkler to be well made and reliable.

The third is desired gains, which is when a product goes beyond expectations – such as a sprinkler system that can be operated with a smartphone app.

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