Planning Target Customers

and Value Proposition:

VPC
Tatang A Taufik

Week #3

STARTUP AND NEW VENTURE MANAGEMENT MMT 3524

SPECIAL ACKNOWLEDGEMENT

This presentation adapted from

○ Emad Saif (2016) Presentation: ”VALUE
PROPOSITION CANVAS 101”
○ My previous presentations, and other sources
stated in References
OUTLINE

INTRODUCTION

VALUE PROPOSITION DESIGN

FITTING VALUE – CUSTOMER PROFILE

CONCLUDING REMARKS
OUTLINE

INTRODUCTION

VALUE PROPOSITION DESIGN

FITTING VALUE – CUSTOMER PROFILE

CONCLUDING REMARKS
 REFERENCES
1. Hudadoff, Pamela. 2009. The Customer Value Proposition: Differentiation
through the Eyes of Your Customer. Applied Product Marketing LLC. 2009.
2. Osterwalder, A., Pigneur, Y., Papadakos, P., Bernarda, G., Papadakos, T.,
& Smith, A. (2014). Value proposition design, John Wiley & Sons.
3. Osterwalder, Alexander dan Yves Pigneur (2010). Business Model
Generation. John Wiley & Sons, Ltd. 2010.
4. -----. The Value Proposition Canvas Instruction Manual, strategyzer.com
 INOVATORS : AT WHAT AGE THEY STARTED?
Steve Jobs – Apple Inc.
21 years
Jonathan Paul Ive –
Design of iMac, iPod,
iPhone, iPad
30 years
Bill Gates –
Microsoft
19 years

Jack Dorsey –
Twitter
30 years

Walt Disney –
Disney Co.
M.E. Zuckerberg – 19 years
Facebook
20 years
 INOVATORS : AT WHAT AGE THEY STARTED?
Larry Page – PageRank Sergey Mikhaylovich
& Google Brin - Google
23 years 23 years
Jack Andraka – Early detection of
pancreatic cancer
15 years

Mike Krieger, 25 years

(left); Kevin Systrom, 27
years - Instagram

Est. 2009; 2011 had 4 workers, in 11 months to 12 and

from serving 4 M users to 27 M.
Bought by Facebook® US$1 billion

Eesha Khare –
super-capacitor
18 years
 INOVATORS : AT WHAT AGE THEY STARTED?
Muhamad Lukman(29); Nancy
Margried Panjaitan (28); Warsito Purwo Taruno -
I Gede and Yun Hariadi (29) - Teknologi Electrical Capacitance
Wenten – Pixel People Project Volume Tomography (ECVT) –
Teknologi Edward Technology
Membran – 37 years
IGW
Emergency
Pump
32 years
Rini Triyani Sugianto –
Animator
25 years

Wahyu Aditya –
Andy Aulia Prahardika - Hello; Motion
Flood sensor device on Academy
airport runway 32 years
18 years
SOME SUCCESSFUL STARTUPS . . .
VALUATION OF
INDONESIA
UNICORNS
VERY COOL INDONESIAN STARTUPS

• William Tanuwijaya (Co-Founder Tokopedia) - Binus

• Ferry Unardi (Co-Founder Traveloka) – Purdue U. (US)

• Kevin Aluwi (Co-Founder Go-Jek) – U. Southern Cal.

(US) & Nadiem Makarim (Brown Univ. & Harvard
Business School - US)
• Achmad Zaky (Co-Founder BukaLapak) - ITB

• Kusumo Martanto (Co-Founder BliBli) – Iowa State U.

(US)
• Jason Lamuda (Co-Founder BerryBenka) – Purdue U.
(US)
LESSONS LEARNED

From time to time . . .

 They learned who their customer are
 Understand what the customer needs, and how
they changed
 Learned how to fulfill their needs and wants
 Learned how to deliver the value, develop
customer relationships, and develop and adjust
revenue streams
 Startup & New Venture Management MMT3524
CC t at 2 0 21 ~ M M T 35 2 4

SPECIAL TIPS
HOW TO START A COMPANY
 Based on Youtube conversation & Wikipedia
HOW TO CREATE A COMPANY Startup & New Venture Management MMT3524
CC t at 2 0 21 ~ M M T 35 2 4

Elon Musk's 5 Rules:

1. Work Super Hard
2. Create a Great Product or
Service
3. Attract Other Great People
4. Understand & Focus on
“Signals over Noise”
5. Take Risks Now
1. WORKS SUPER HARD Startup & New Venture Management MMT3524
CC t at 2 0 21 ~ M M T 35 2 4

• Work hard every waking hours

• If somebody is working 5 hours, then you are
working 100 hours
• You’ll get twice as much done . . .

After 4 years (1995 - 1999) of hard work, Elon and

Kimbal Musk sold their first company “ZIP2” for
$305 Milion
2. CREATE GREAT PRODUCTS OR Startup & New Venture Management MMT3524
SERVICES CC t at 2 0 21 ~ M M T 35 2 4

• Make sure that whatever you’re doing, create a

“new product or service” OR
• Much much better than existing products or
services
3. HIRE GREAT PEOPLE Startup & New Venture Management MMT3524
CC t at 2 0 21 ~ M M T 35 2 4

• Attract great people to work with you

• Great people are keys to the success of the
company
4. UNDERSTAND & FOCUS ON SIGNAL OVER Startup & New Venture Management MMT3524
NOISE CC t at 2 0 21 ~ M M T 35 2 4

• Spend money & effort to make your products

or services better, and nothing else
• Are these efforts – that people expending – are
resulting in better products or service?
• If they are not, save these efforts
5. TAKE RISKS NOW Startup & New Venture Management MMT3524
CC t at 2 0 21 ~ M M T 35 2 4

• Now is the time to take risks

• Do something bold
 REVIEW: BMC

Value Proposition: Customer Relationships:

Key Activities: 1. CR1
1. VP1 . . .
1. KA1 . . . 2. CR2
2. VP2 . . .
2. KA2 . . . 3. CR3
3. VP3

Customer Segments:
1. . . .
2. . . .
Key Partners:
1. KP1 . . .
2. KP2 . . .
3. KP3 . .
Channels:
1. C . . .
2. C . . .

Cost Structure: Revenue Streams:

Key Resources:
1. CS1 . . . 1. RS . . .
1. KR . . .
2. CS2 . . . 2. $ . . .
2. KR2 . . .
3. . . .
9
building
blocks Business Model Canvas
BUSINESS MODEL CANVAS ~ CHECK YOUR CASE

8. KEY 7. KEY 2. VALUE 4. CUSTOMER 1. CUSTOMER

PARTNERS ACTIVITIES PROPOSITION RELATION SEGMENT
Most important Most important activities How to attract, increase
Value promised to & retain customer Groups of people/
partners
e.g. : be delivered to the organizations to be
• R&D customers e.g.:
e.g. : • Low cost rent
served
• Production
• Expert partners • Room/space rent e.g. : • Expert support
• Access to laboratories e.g.:
• Internasional R&D • Innovative products
• Young executives with >
institutes • Environmental
Rp. 15 M monthly salary
• 6. KEY friendly products
Anchor industries 3. CHANNEL • AAA
• Bla bla bla
• Funding organi- RESOURCES • Bla bla bla
The way to connect • BBB
zations Main resources company’s value • CCC
• ….
proposition to the
e.g. : customer
• Building
• IP e.g. :
• Online COD
• Labs. • Mentoring facilities
• Exhibition/Seminar, etc.

9. COST STRUCTURE 5. REVENUE STREAM

Cost implide due to company’s operations How the company gets paid
e.g. : e.g. :
• Salary • Rent
• Overhead costs • licensing
• Tax • Grants
BUSINESS MODEL CANVAS ~ CHECK YOUR CASE

8. KEY 7. KEY 2. VALUE 4. CUSTOMER 1. CUSTOMER

PARTNERS ACTIVITIES PROPOSITION RELATION SEGMENT
Most important Most important activities How to attract, increase
Value promised to & retain customer Groups of people/
partners
e.g. : be delivered to the organizations to be
• R&D customers e.g.:
e.g. : • Low cost rent
served
• Production
• Expert partners • Room/space rent e.g. : • Expert support
• Access to laboratories e.g.:
• Internasional R&D • Innovative products
• Young executives with >
institutes • Environmental
Rp. 15 M monthly salary
• 6. KEY friendly products
Anchor industries 3. CHANNEL • AAA
• Bla bla bla
• Funding organi- RESOURCES • Bla bla bla
The way to connect • BBB
zations Main resources company’s value • CCC
• ….
proposition to the
e.g. : customer
• Building
• IP e.g. :
• Online COD
• Labs. • Mentoring facilities
• Exhibition/Seminar, etc.

9. COST STRUCTURE 5. REVENUE STREAM

Cost implide due to company’s operations How the company gets paid
e.g. : e.g. :
• Salary • Rent
• Overhead costs • licensing
• Tax • Grants
VALUE PROPOSITIONS
Value Proposition Canvas

Special thanks to strategyzer.com for

their inspiring work!
VALUE PROPOSITION
Describes the benefits customers can expect
from your products & services

VALUE PROPOSITION

PRODUCT / CUSTOMER
SERVICE
PRODUCT / CUSTOMER
SERVICE

NOT EASY
29
#1
STARTUP
MISTAKE

Building
Something
Nobody Wants
BI
CHALLENG
Wasted time &
resources

Unproductive

G
E
Startup Enterprise
meetings Uncommon

language
Produc
t
Failure
Need better approach
for creating value for
customers &
lowering risk of
failure!
OUTLINE

INTRODUCTION

VALUE PROPOSITION DESIGN

FITTING VALUE – CUSTOMER PROFILE

CONCLUDING REMARKS
VALUE PROPOSITION CANVAS
 Value Design Process

Extract Prioritize Design Prioritize Run Capture Make

Hypothesis Hypothesis Tests Tests Tests Learnings Progress

our focus
Value Proposition Canvas (VPC)
9
building
blocks Business Model Canvas
Business Model Canvas
TARGET MARKET ~ TARGET CUSTOMERS Startup & New Venture Management MMT3524
CC t at 2 0 21 ~ M M T 35 2 4

• Do your homework
• Know your “customers” better and better
• Know and understand what their “pains”,
“gains”, and “jobs”  “problems”
 Product - Market Fit

FI T
?

Value Map Customer Profile

The set of value The set of customer

proposition benefits that characteristics that you
you design to attract assume, observe and
customers verify in the market
 Value Proposition Canvas (VPC)

gain
creators gains

products jobs
&
services

pain pains
relievers

Value Map Customer

Profile
CUSTOMER PROFILE EXPLANATION Startup & New Venture Management
MMT3524
CC t at 2 0 21 ~ M M T 35 2 4

• Gains – the benefits which the customer expects and needs, what would delight
customers and the things which may increase likelihood of adopting a value proposition.
Pains – the negative experiences, emotions and risks that the customer experiences in the
process of getting the job done.
• A pain point are specific problems that prospective customers of your business are
experiencing. In other words, you can think of pain points as problems, plain and
simple. Like any problem, customer pain points are as diverse and varied as your
prospective customers themselves.
• Value proposition canvas customer jobs include different tasks, problems or wish the
customers are intended to deal with, solve or satisfy. By doing so, you refine the
customer segment from the emotional (preferences, popularity), social (reputation, sense of
duty), and functional (practicability) perspective.
• Customer Jobs : merupakan tugas fungsional, sosial dan emosional yang dilakukan oleh
pelanggan, dalam menyelesaikan dan memenuhi kebutuhan mereka.
 INSPIRED
PRODUCT
INNOVATION

Value Map Customer

Profile
 INSPIRED
CUSTOMER
INNOVATION

Value Map Customer

Profile
OUTLINE

INTRODUCTION

VALUE PROPOSITION DESIGN

FITTING VALUE – CUSTOMER PROFILE

CONCLUDING REMARKS
 Customer Profile Overview
OBJECTIVE: Visualize what matters to OUTCOME 1 page
your customers in a : actionable
sharable format customer profile

1 2 3
Download the Grab a Set Map Out
Customer of Small Your
Profile Sticky Customer
Canvas Notes Profile
 Choosing a
Customer Segment
Customer Segment

Definition:

The groups of people or organizations who

share similar characteristics that you aim
to reach and create value for them
 MARKET
SEGMENTATION

DEMOGRAPHICS GEOGRAPHICS BEHAVIORAL PSYCHOGRAPHICS

Age Local Benefits Activities

Gender National Usage Rates Personality

& Values

Income Regional Patterns Attitudes

Marital International
Status

Ethnic
Background
 LE
X A MP
E
Taxi Passengers in Amman, Jordan

AN

1. Customer Segment
Taxi Passengers in Amman, Jordan
2. Customer Jobs What customers are trying to get done?

Call Taxi

Find Taxi
Give
direction
s
Pay
 What annoys the customer before,
3. Customer Pains during & after getting job done

Call Taxi

Find
Taxi
Give
direction
s
Wait a
long time Compete with Pay
other customers
Unsafe
driver Overcharge
d by Taxi
 What outcomes & benefits
4. Customer Gains customers want?

Fair price
Easy
payment
Arrive on Call Taxi
time

Professional Find Taxi

Give
directions

Wait a
long time Compete with Pay
other customers

Unsafe
driver Overcharged
by Taxi
5. Ranking What is the customer priority?

Fair price
Easy
payment
Arrive on
Call Taxi
time
Find
Professional
Taxi
Give
directions

Wait a
long time Compete with Pay
other customers
Unsafe
driver Overcharge
d by Taxi
5. Ranking What is the customer priority?

Arrive on
time

Ranked
Fair price
Call Taxi
Professional

Easy Find Taxi

Ranked
payment
Give
Wait a direction
long time s
Overcharge Pay
d by Taxi
Ranked

Compete with
other customers
Unsafe
driver
 Customer Profile Summary

OBJECTIVE Visualize what matters to OUTCOME: 1 page actionable

: your customers in a customer profile
sharable format

1 2 3 4 5
Select Identify Identify Identify Prioritize
customer customer customer customer jobs, pains
segment Jobs pains gains & gains

Note: Further indepth analysis can utilize Multi Criteria Decision Analysis/Making approaches,
e.g., AHP (Analytic Hierarchy Process) or ANP (Analytic Network Process)
 Value Map Overview

OBJECTIVE: Describe explicitly how your OUTCOME 1 page map of

products and services create : value creation
value

1 2 3 4
Grab the Customer Download the Grab a Set Map out how
Profile you Value Map of Small you create
previously Canvas Sticky value for your
completed Notes customers
1. Products & Services What you offer customers

Arrive on
time
Fair price
Call Taxi
professiona
l Easy Find Taxi
Taxi
payment
Smartphone
App Give
Wait a
direction
long time
s
Overcharge Pay
d by Taxi
Compete with
other customers
Unsafe
driver
 How exactly your products and services
2. Pain Relievers alleviate specific customer pains

Arrive on
time
Fair price
Call Taxi
professiona

Taxi l Easy Find Taxi

Smartphone payment
App Give
Wait a
direction
long time
Instant s
No Cash booking Overcharge Pay
d by Taxi
Compete with
Assigned Cost
System other customers
driver
Unsafe
driver
 How your products and services
3. Gain Creators create customer gains

Arrive on
Professional time
Save Time
drivers Fair price

Rating Call Taxi

professiona
System
Visual Map l Easy Find Taxi
Taxi payment
Smartphone Give
App Wait a
direction
long time
Instant s
No Cash booking Overcharge Pay
d by Taxi
Compete with
Assigned Cost
System other customers
driver
Unsafe
driver
 Products & Pain Relievers Gain Creators
Save Time Professional Services Rank Rank pains from Rank gains from
drivers products & services nice to have to nice to have to
from nice to have to essential essential
Rating essential
System
Visual Map

Taxi
Smartphone
App
Instant
No Cash booking

Assigned Cost
driver System
 RANKED

Save Time Products & Pain Relievers Gain Creators

Services Rank Rank pains from Rank gains from
Professional drivers products & nice to have to nice to have to
services from nice essential essential
Rating System to have to
essential

Taxi
Smartphone
App Instant
booking
Assigned
driver
Cost
System
No Cash
 Ranked VPC
Save Time
Arrive on
time
Professional drivers
Fair price
Rating System
Call Taxi
Professional
Visual Map
Easy Find Taxi
Taxi
Smartphone payment
App Instant Give
Wait a direction
booking long time
Assigned s
driver Overcharge Pay
d by Taxi
Cost
System Compete with
other customers
No Cash
Unsafe
driver
 Value Map Summary

OBJECTIVE Describe explicitly how your OUTCOME: 1 page map of

: products and services create value creation
value

1 2 3 4
List Outline Outline Rank by
products pain gain order of
and relievers creators importance
services
Fit Overview

OBJECTIVE: Verify if you are addressing OUTCOME: Connection between your products
what matters to customers and services and customer jobs,
pains, and gains

1
Bring in the Value Proposition Map
and Customer Segment Profile you
completed earlier.

2
Go through Pain Relievers and Gain
Creators one by one, and check to see
whether they fit a customer job, pain,
or gain.

3
Put a check mark on each one that
does.
 Taxi Smartphone Application

Save Time Arrive on

time
Professional drivers
Fair price
Rating System
Call Taxi
Professional
Visual Map
Easy Find Taxi
Taxi
Smartphone payment
App Instant Give
Wait a direction
booking
long time s
Assigned
driver Overcharge Pa
d by Taxi y
Cost
System Compete with
other customers
No Cash
Unsafe
driver
Test Your Customer Assumptions

Best Fit

wrong
assumptions!

Customer
Adjust &

Redesign
1

Best Fit
2

n
 Taxi Smartphone App
ad-lib
VALUE Taxi passengers
P ROPOSI TI ON
TE MP LATE

book a taxi

minimizing waiting time for a taxi

enjoying affordable prices

Typical taxi services by

phone
Strategyzer.com/vpd
OUTLINE

INTRODUCTION

VALUE PROPOSITION DESIGN

FITTING VALUE – CUSTOMER PROFILE

CONCLUDING REMARKS
 SUMMARY

1. 2.
The Value Proposition Canvas Extract value
(VPC) helps clarify the customer propositions
needs & how to create value for using ad-libs
them

3. 4.
Validate by Take insights
talking to and update
customers VPC
INTERESTING & IMPORTANT ISSUE(S)
● Van Alstyne, Marshall (2016). How Platforms Change Strategy. MIT Initiative
on Digital Economy.
Firm Year Empl. Mkt Cap
BMW 1916 116,000 $53B

Uber 2009 5,000 $60B

Marriott 1927 200,000 $17B

Airbnb 2008 3,000 $21B

Walt Disney 1923 185,000 $165B

Facebook 2004 12,691 $315B

Kodak 1888 145,000 $30B (heyday)
Instagram 2010 13 $1B (acquisition)
MINIMUM VIABLE PRODUCT (MVP)
MINIMUM VIABLE PRODUCT (MVP)
Some other definitions
Assessing the Feasibility of your Minimal Viable Product
(Source: Balmelli, Laurent, 2019)

Three types of assumptions for product ideas as used in Design Thinking and other
methodologies (Source: Balmelli, Laurent, 2019)
 ASSIGNMENT: ARTICLE REVIEW & Startup & New Venture Management MMT3524
PRESENTATION SCHEDULE CC t at 2 0 21 ~ M M T 35 2 4

• Summary of the article in a presentation form (ppt)

• 15 minutes presentation
Week # - Date Group # Paper # / Topic

# 4 - June 14, 2021 2 # 01 – Dennehy et al (2016) Product-Market Fit

# 5 – June 21, 2021 6 # 02 – Product Plan

# 6 – June 28, 2021 4 # 03 – Biz Plan for Startup

# 7 – July 5, 2021 3 # 04 – Dezhi et al (2012) Successful Business Plan

# 10 – July 26, 2021 1 # 05 – Mueller & Thoring (2012) Design Thinking - Lean Startup

# 11 – August 2, 2021 5 # 06 – Achibane & Tlaty (2018) Funding Startup Companies

Thanks for attention...
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