Startup Library

4. Define your value proposition

Your product defines your Features.

Your people define your Benefits.

Your customer defines your Value.


Sometimes new entrepreneurs think that customer value can be captured by describing the features of their products. But a value proposition is not a feature.

A simple way to get to understanding your customer needs, and design products and services they want, is to use the value proposition canvas. It works in conjunction with the Business Model Canvas and other strategic management and execution tools and processes.


How to use the Value Proposition Canvas

To get started with the Value Proposition Canvas, always begin with the customer. First, have a conversation with your team about who your customer is. Use the customer personas to sketch the person you are focusing on.

value proposition canvas

Value proposition template

Work your way from the right of the canvas to the left. It’s important to have a clear set of jobs to be done, pains, and gains for your customer before you can really see if your value proposition will work for them. Once you’ve completed the right side, you can move on to the left side and cover your own product.

Below is an example of what the canvas would look like for Tesla

value proposition canvas filled

Notice how there is a fit with the upper middle class man and what the Tesla has to offer. Take the same customer on the right side and put a Toyota there instead, and there is an immediate misfit.

value proposition canvas misfit

In this second example, you see the Value Proposition Canvas that has a misfit. The left hand side doesn’t match with the right hand side. You can see that the right side is target customer for Tesla, and on the left side you’ll see a value proposition of a Toyota. If you look at the left side of the Canvas, you see that the product, pain relievers and gain creators doesn’t fit with the wishes of the customer.

So what?

After showing a fit and a misfit of the the Value Proposition Canvas, we can conclude that it is very important to know who your customer is, what his lifestyle looks like, and what his real needs are. If you don’t know who your customers are, there may be a misfit with your product/service. Make sure the right side of the canvas matches with the left side of the canvas.

Use Journey Map template to understand the details of customer behaviour pre-service, during service and post-service. Understand specifically where the pain is.

If you want another example of how to use the value proposition canvas, check out this article by Isaac Jeffries.

How to fill in a value proposition canvas.

For inspiration around the “jobs to be done” for a B2B and B2C customer, check out this HBR article.

The B2B Elements of Value
The B2C Elemenets of Value