Steve Blank - What Is A Value Proposition

The first and most important question right at the beginning. What is your value proposition? What do you offer and who benefits from it? If you can not answer this clearly, think about your intention.

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In the last article we talked about what a business model should look like and we created this spreadsheet (download available in the article). Based on that we will begin with the first question therein. What is it that you can deliver to your users? Is there any need whatsoever and how does your value proposition contribute? This question may confuse many and the answer is often: "Everyone needs this of course and I am of course making a big contribution with it!" Yes, from your point of view it may sound logical, but the market works differently. Take for example a cover song that became a world hit (there were many of them!). Why was the original not that famous? Why did this band or singer not make it to the top? Being at the right place at the right time... There is truth in that.

It is not about how you feel or value your idea or your product. It is all about satisfying a customer need or customer problem. Demands... What can I deliver... 20 years ago nobody had the need for efficient batteries as we know them from electric cars today, this would have been a poorly chosen time. 20 years ago we had no need for 500MBit internet connections. Websites were very text-heavy. Today we stream entire films over airwaves. 20 years ago it made no sense to have a 4K television in your living room. A DVD could only deliver a small part of the resolution. There was simply no need.

Once again the most important question: What problem are you solving? Which added value do you offer and who are your customers? The value proposition is a better definition for your customer of what product and/or service you have to offer. This may also be a niche (a rare medication possibly) as well as a mass market (YouTube).


It is well known (and as mentioned above) that you are convinced that you have a jack of all trades in your drawer and your technology is the measure of all things... You use the coolest framework, have the greatest website, the fastest server and the best people... However, people who visit YouTube are not interested in that. They click on the player and watch the video, search for something and find it... It is bitter, but unfortunately it is the truth. YouTube puts on their pants one leg at a time, too, and their technologies are questionable and outdated but the consumer gets what he needs... and in an impressive way on this very platform.

Facebook delivers very questionable content and is (in large parts rightly so) attacked and criticized by the media. People are not interested though, because Facebook is well aware of its value and that is what counts for most of the two billion users. Dad´s need to express himself and his opinion, with other people - no matter where in the world - very quickly, knowing what is going on in the family or neighborhood or just to satisfy his curiosity.

Both Facebook and YouTube have understood perfectly which contribution they make and the technology behind that may not even likely interest 100,000 people among the billions of users. Find your value proposition and focus on it, no matter how good your idea is, position it properly, satisfy the needs of your customers and you will have taken an important step in the right direction and laid the foundation to success.

This article is written by our CEO, Bernd Korz. With his experience as an entrepreneur, he shares his vision about the lessons provided by Steve Blank. Join us every week for a new article on Steve Blank’s lectures.

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