Product-Market fit for an invention or new product occurs when you have demonstrated that the product’s value proposition creates real value by generating gains for customers or relieving their pains. Before we can search for the best fit, we must fully understand our invention’s value proposition.
Securing funding for research and commercialization projects can be a highly competitive process. Applications to a specific funding pool are made because the proposed research will fill a gap in knowledge or solve a pressing industry need, and successful applicants will be those who position their proposals in the best light, convincing the funders that they have the right teams, demonstrated experience, resources, and solutions to meet the stated need.
When commercializing an invention, the product or service is more attractive to investors or potential licensees when supported by market data demonstrating a defined target market with strong demand for the invention or a potential product, if one is not yet fully developed, a realistic cost to get to market, and a convincing value proposition..
The following sections will examine the importance of value propositions and market analysis for commercialization in more detail.
What is a Value Proposition and Why is it Needed?
A value proposition is a foundational element of business, communications, and marketing. As we learned in Module 3 It is the promise that something of value, or benefit, will be delivered to a select audience from the actions taken by that business or project. It is a clear and concise statement that summarizes why an audience should choose the presented solution by defining what is being done (the solution) and why the solution is uniquely different and important to the target audience. For a business a value proposition could be how their product solves a common problem in a new way for customers, while a research value proposition can position why a research project should be selected for funding above all others.
Before a value proposition can be developed, written, and improved, considerable research must be conducted to understand what end-users need. Do everything possible, including talking to a hundred potential customers if needed, to fully understand the problem experienced by customers. This is called Problem Validation. The next step is to determine what potential customers value, how they want their problems solved, which gains are most important to them, and which pains they desperately need removed. This is done by exploring the various ways your invention or product might provide a benefit to the customer. With these things in mind a clear value proposition can be crafted.
The main components to any value proposition are:
- Identification of the target audience (customer/end-user)
- Identification of their need or the opportunity
- A description of the proposed solution
- A statement of end benefit
Writing a Value Proposition Statement
Several templates exist that can support the writing of a value proposition statement. Below are two guiding formulas that exist along with associated examples:
Value Proposition Formula (condensed from Moore, G. A., 1991)
For [target customer] who [statement of need/opportunity] the [product name] is a [product category] that [statement of benefit].
An example of a value proposition statement based on the above formula is: For elite athletes who struggle with jetlag, our research on the bioavailability of melatonin supplements will provide travel recovery solutions that will help them to be more competitive at international competitions.
- target customer = elite athletes
- statement of need/opportunity = struggle with jetlag
- product name & category = research on bioavailability of melatonin supplements
- statement of benefit = provide travel recovery solutions that will help them to be more competitive at international competitions
Value Proposition Formula (Blank, S., 2011)
We help (X) do (Y) by doing (Z).
An example of a value proposition statement based on the above formula is: We help elite athletes to overcome jetlag by providing recovery solutions through our research into the bioavailability of melatonin supplements.
- X = elite athletes
- Y = overcome jetlag
- Z = providing recovery solutions through our research into the bioavailability of melatonin supplements
Understanding the Audience, Customers, and Stakeholders
Crafting and evaluating a convincing value proposition statement relies on developing an understanding of the target audience or customer. This includes knowing what tasks or intentions they have, what difficulties are encountered in preparing for or executing those tasks, and how positive outcomes or aspirations are measured or gauged. Developing customer personas, or conducting customer surveys, can provide insights into customer perspectives and help inform the development and validation of your value proposition statement.
Customer personas are imaginary characters developed to be representatives of real customers based on facts, data, and behaviours from the targeted audience types. By having a clear idea of who the intended audience is it is possible to determine what their specific needs, feelings, and pain points might be.
Value Proposition Canvas
With a clear understanding of the customer and their needs, the next step is to ensure those needs fit with the proposed solutions and benefits of your value proposition. The Value Proposition Canvas is a tool that can help demonstrate the fit between the customer profile and the proposed value proposition validating the need or desire for the product or service. If the Value Proposition Canvas shows a misalignment of customer profile and the proposed value proposition, a re-evaluation is needed – either of the target audience, as perhaps another demographic or group would be more attracted to the proposed value proposition, or a re-evaluation of the proposed value proposition to craft a statement that resonates with the customer.
To gain more familiarity with the Value Proposition Canvas and its use watch this video from Strategyzer.
Review the chart to consider examples of each types of value Proposition.
|Value Prop. Products and Services
|Value Prop. Pain Relievers
|Value Prop. Gain Creators
|Achieve Personal Best Performance
|Long Recovery Time
|Optimize Sleep During Travel
|Reduce Jetlag Recovery Time
|Safe and Effective Supplement
|Land on the Podium
|Better Health and Wellbeing/ Well Rested
|Research Based Recovery Strategy
|Increase focus and improved quality of sleep
|Competition Drugs/Treatment Restrictions
Now that you’ve had an opportunity to try using the Value Proposition Canvas in this activity, try it out with your own projects. Visit Strategyzer to access a copy of the Value Proposition Canvas and try it out to analyze your own ideas.