Steve Blank - Value Contribution = Solving a Problem

Those who only point out problems and no solutions do not create value for their customers. Those who only bring solutions and cannot explain where the problem lies will not be able to convince their customers.

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What was first? The hen or the egg? You could ask yourself that question in regard to your value contribution. Was the solution or the problem there first? Sounds crazy? Yes, it kind of is... Many startups make mistakes in their presentation to convince a customer. You look at a problem, which you - possibly - are able to solve, and directly build a solution approach. Then you go to the customer and demonstrate the solution and wonder why the customer doesn't jump on it right away, after all, you have a solution for his problem. In fact, the problem here is much deeper. First of all, you have to put yourself in the position of your counterpart. We as an outsider are just telling him that he has a problem that needs to be solved. It is not uncommon that an inner blockade occurs and the customer feels attacked.

"Why should there be a problem here?", "We've always done it this way", "And what makes you think you know that better from the outside than we do?"... Such questions are not unusual. Other statements like: "This has never really worked for us, we know about it, but actually have no solution ready at the moment" are rarely heard. So what should you do? The value contribution is your contribution to solve an existing problem, it is not about creating something that is meant for eternity and not infrequently it is even of short duration to do the next step. You should be aware of this and approach the matter that way.

 

 

You should be well prepared and objective with your customers. A detailed description of the problem also shows directly that you have thought about it. One should also pay attention to avoid sentences such as "You made a mistake there..." or "you overlooked that" or "you should never have done that like that". You should be able to describe your problem neutrally. Afterwards one can briefly find out in dialogue whether described the problem correctly, but without falling into a deep discussion of details, after all, we already have the "solution of the problem" in the backhand.

Now comes the moment where you present your solution and how your customer can benefit. This is where you create value for your customer (and possibly future long-term partner). In the ideal case you already have a prototype, no matter if it is a tool, a software or a formula, it's only about: problem > solution. The better your prototype, the better you can visualize your solution, the higher your chances to convince your customer and get back with an order in your pocket. 

 

 

We have often made the mistake of holding the solution directly in front of our potential customers and telling them what they are doing wrong and why they can only lose with it and no less often we have not reached the desired goal with it. It was only after we had adopted the strategy of value contribution that we were able to transform this initial situation into something positive.

 

 

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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