How to Create Products and Services Customers Want
Your family and friends and your “significant other” think so too. So now you have a dream. You go to the bank. They tell you about an SBA loan. You write your business plan, get financed, find someone to manufacture your product, get the website up and social media running, sit back and wait for the sales to roll in. You wait, and wait, and well…wait. Nothing happens. What went wrong?
Although your family and friends are great—they are probably not your target consumer. You need to identify your customers and find out if your product solves a problem they have, thereby creating value and ensuring your product or service is something people will pay for.
It used to be that an idea, a business plan and proper funding could get a business off and rolling. But times have changed. There are so many great ideas and ways to reach your customer that we need to look at start-ups differently if we want to limit failures and broken dreams.
Instead of writing a business plan first, begin with these two processes: 1) determine your company’s value proposition design, and 2) develop your Business Model Canvas.
VALUE PROPOSITION DESIGN Value Proposition Design by Alex Osterwalder is a great resource on how to create products and services customers want.
He explains that the new way to conduct a start-up is to begin with your prospective customers’ “pain points.” The best way to understand your customers’ pain points or problem is to ask them. Ask them BEFORE you make it ready for sale.
Next, what are they willing to pay for this product or service? Find out by hosting focus groups, do one- on-one interviews in a mall or on a street corner. Just identify yourself. Tell the person you have targeted what you are doing, why and that you will only take five minutes of their time. You can also compile your questions and create an online survey. By identifying your target customer, their pain points and your product that solves those problems, you are ready to begin the journey.
BUSINESS MODEL CANVAS The next practice I recommend for entrepreneurs is the Business Model Canvas, a strategic management template that visually describes a product’s value proposition, infrastructure, customers and finances.
The Business Model Canvas has 9 quadrants, or building blocks, that are key to making sure you have considered all of the activities needed for your business. The process asks you to test your hypotheses, pivot, retest, pivot and test again until you are confident you have everything in place to be successful.
Now you are ready to write a tight business plan and be confident you are selling to the right audience, creating value, generating revenue and will have a successful business.
I have used both the Value Proposition Design and the Business Model Canvas to develop a new business venture that is scheduled to open before the end of the year. In the process, I held a workshop with former colleagues, friends and local Topeka business leaders to help me define my company model.
I successfully used this process at the Hill’s Pet Nutrition Company as the Director of Upstream (Long Term) Innovation. I looked at trends and market disruptions to develop strategies for new cat and dog food product innovations. Once a developmental area was determined, I immediately identified prospective customers and pain points which led to innovative product solutions to address their problems.
To summarize, make sure your idea is unique vs. others, will be widely embraced by your customer and who will be willing to pay the price you intend to charge.