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TEI 215: The best way product managers should use the Value Proposition Canvas – with Alan Smith

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Understand a customer’s jobs, pains, and gains for effective product management

Product Manager Interview - Alan SmithFiguring out what your customer wants and needs from your product or service is the heart of product management. That is the beginning of how we create products that customers love.

And, there are tools to help you do that. In this discussion, you will learn about a tool that has been available for a few years, but I rarely find product leaders and managers using it. It’s called the Value Proposition Canvas.

We explored the concept of value proposition back in episode 123 with Alex Osterwalder. Now we talk with his co-founder Alan Smith. Together they started Strategyzer, which may be best known for their award-winning books Business Model Generation and Value Proposition Design and related training.

Alan is a multitalented designer and UX professional. He loves building tools to help drive strategy and innovation in organizations, which makes him a great person to talk with us, Everyday Innovators.

The Value Proposition Canvas consists of two sides:

  1. customer segment profile, and
  2. the value map

Summary of some concepts discussed for product managers

[3:03] How did the Value Proposition Canvas come about?

We looked at how people were actually using the Business Model Canvas. We found that people couldn’t express the value proposition in one or two post-it notes. They were trying to express their customers’ problems and goals and the signal to us was that it was a separate problem. It sounds simple, but it’s really hard to do and there are a million ways to do it.

[6:22] Can you give us an example of how it’s been used?

In the early days of Strategyzer, we built an iPad app for the Business Model Canvas. We created a roadmap filled with what we thought were logical features to add. We zoomed into the value proposition and saw that very few of the features we wanted to add were going to add value to the customer or address issues they had. In 60 minutes of working with the Value Proposition Canvas, we realized our roadmap was wrong and scrapped it completely.

[12:34] What is the Customer Segment Profile?

We based it on the Jobs to be Done model and tried to make it a little more actionable. What are the risks associated with getting something done? What current solutions are not working? We call those the pains. Then, there are the gains, which are the opposite. You can define a job as a series of tasks or a larger narrative – either will work in the Value Proposition Canvas.

[17:04] What’s the best way to use the Customer Segment Profile?

It’s best if you have some customers already. Have your team go through them and pick out the jobs, pains, and gains. If you don’t have customer interviews, try to get people together to think through jobs, pains, and gains in person. Then, determine which of the jobs matter most to the customers. You can also map functional, social, or emotional jobs to determine whether they are internal or external.

[23:57] What is the Value Map?

The value map has three parts. Products and Services, the Pain Relievers, and Gain Creators. Everyone can list products and services, but the other two are more difficult. The pain relievers and gain creators focus on what those specific features allow a customer to do or what pain a feature eliminates for them.

[27:29] How does Value Proposition Canvas relate to a Minimum Viable Product?

You’ll have ideas that feel so natural and so right, but when you try to add them to the Value Proposition Canvas, you’ll see that they don’t meet your customers’ needs at all. It’s important to keep the customer job, pains, and gains in mind, even if you are trying to build a minimum viable product. Finding the jobs that are least served provides a good path toward creating a minimum viable product.

[31:05] What mistakes do people make when trying to use the Value Proposition Canvas?

People always put in way too many things; the mistake is not consolidating and deciding what’s relevant to your strategic focus. Don’t try to capture everything about a customer, just focus on what’s relevant. Don’t be afraid to go outside of the direct space that your product serves. Can a product address multiple jobs at once? Look for opportunities like that when possible. On the value map side, you need to create a separate value map for each customer profile you have. It’s okay if they’re mostly the same, but they should never be identical as long as the customers are different. Understand what your value proposition is to each one of them.

Useful links:

Innovation Quote

“Most problems are people problems and most people problems are communication problems.” -Unknown

Thanks!

Thank you for being an Everyday Innovator and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it on your favorite social network.