Entrepreneurship 101: Understanding Business Model Canvas - Value Proposition

The last post was about introduction to the Business Model Canvas. A tool that would help you to get the big (and complete) picture of how your idea would scale up to be. Right from your idea to your customers, key activities and partners, cost and revenue streams, Business Model Canvas covers all the important aspects. This post will talk about the value proposition or the core value that you plan to offer.

Everything starts with a problem. The problem can be as small as finding good restaurants to eat or it can be as complex as photographing the Black Hole. As an entrepreneur or an ideator, your job is to find solution to a problem. It's said that every problem can have multiple solutions. Thus it becomes important to showcase why your solution is the best one. Also remember that there is nothing like a bad idea. 

So how do you actually rank and rate ideas ? There are 3 critical parameters to judge an idea:

• Feasibility: It's always suggested to conduct a feasibility analysis of your idea/solution. Your idea might be a show stopper on paper but might not be feasible to implement. That may be due to high costs - either at the prototype stage or post scaling up. You need to consider the feasibility aspect of the idea. Further, to implement your idea you may need technical expertise which you might lack. Whether you outsource the technical work or build the capability which is your choice. Thus, feasibility is an important aspect to rank your idea.
• Desirability: Like mentioned earlier, there may be many solutions to one problem but is your idea desirable ? Let's take a simple example, a small room is heating up and you need to cool it down. You can either place one air conditioner or place 10 fans. In most cases, placing 10 fans might not be desirable due to the space they occupy or the noise they would generate. One needs to carefully work on the desirability of their idea and check if it would be acceptable.
• Viability: Viability is all about will your idea be viable in the long run. Does it eliminate the problem from the root or it's a band aid fix ? For instance you are building a website that can handle 1000 users. What if there is a surge in number of users, will your website be able to handle the load ? What if the there are new devices/browsers launched in the market in future, will your website work across devices ? These are some simple questions that need to be asked.

Value Proposition in Business Model Canvas

The vital part of the Business Model Canvas is the value field. You need to mention all the points that your idea is all about. Highlight the USP of your product and the value it creates for the end user. Mention the points of differentiation from other solutions currently in the market. The Value field of the Business Model Canvas provides the highlights of your idea and you need to ensure you mention all the key points there.

Example Business Model Canvas - Value Proposition

Below is a value field of the business model of Uber cabs. One of the most used cab service in the world, Uber has simple set of values that it provides to its customers. Similarly, you too can place the value that your solution provides to the customer.

Business Model Canvas of Uber. Image Courtesy: Business Models Inc

That was all about the value field in the Entrepreneurship 101: Business Model Canvas - Value Proposition. In the next post we shall discuss the Customers aspect of the Business Model Canvas. How do you think you can enhance the value proposition of your business model canvas ? Mention in the comments below.