VALUE PROPOSITION

INNOVATIONS: HOW TO “SELL” THEM

THE VALUE PROPOSITION!

 Can you explain your innovation/thesis in 3 minutes?

 Including the need, the approach, the benefits and the
competition/alternatives?

Need Approach Benefits

• 50mpg? • Weight reduction by • Increased market

• Zero emissions? materials share?
• Comfort and style? substitution?
• Improved engine
technology?
 VALUE PROPOSITION DEFINITION

 Your Value Proposition is: a statement that includes your

important customer and market
 Need along with your new, compelling, and defensible
 Approach to address that need with superior
 Benefits per costs when compared to the
 Competition and/or other alternatives

 Successful Value Propositions are quantitative and easy to

understand and remember
 The four parts of your value proposition are the fundamentals:
they must always be answered
AN ALL-TOO-TYPICAL FIRST DRAFT…

“The world needs a little red wagon …”

N A B C
 AN EVERYDAY EXAMPLE

I understand that you are hungry (Need). Let’s go to the

Campus Center (Approach). It has great food, it’s quiet, and
we can continue our discussion better (Benefits/costs) than
McDonald’s (Competition/alternative).

 We naturally create Value Propositions in our everyday life

 An SRI employee even developed one for a marriage proposal
 It worked!
 When translated to the business environment, they are
remarkably rare
 Remember: only your customer defines your value
IMPROVE YOUR VALUE PROPOSITION,
BE QUANTITATIVE
Need
• Not: The market is growing fast
• Rather: Our market segment is $2B/yr and growing at 20%/yr

Approach
• Not: We have a clever design
• Rather: We have created a patent-protected, one-step process that replaces the
current two-step process with the same quality

Benefits
• Not: The ROI is excellent
• Rather: Our one-step process reduces costs by 50% and results in an expected
ROI of 50% per year with a profit of $30M in year 3

Competition
• Not: We are better than our competitors
• Rather: Our competitors are Evergreen Corporation and Bigway, which use the
current two-step process

Qualitative statements are not persuasive!

 JUDGING CRITERIA

• The Need was clearly presented in a compelling presentation. (0 – 10)

• - (0-1) did not hear a need
• - 10 = the need was important and clear.
• -Is the idea based on a clearly identifiable client/customer need?
• -Is it innovative, bold, and world-changing?
• -Has the need been clearly defined and supported?
• The Approach will meet the Need. (0 – 5)
• -Does the idea represent a truly original concept?
• -Has technical feasibility been demonstrated?
• -Has a reasonable strategy for moving ahead been made?
• -Is there a path to commercialization?
 JUDGING CRITERIA

The Benefits of this project are clear. (0 – 5)

-Is the value proposition defined?
-Is there intellectual property involved?
-Is there market data to support the proposed strategy?
-Does the idea have a competitive advantage?
-Is it a viable investment candidate?
 
The Costs and Competition are clear. (0 – 5)
-Have the risks inherent in the idea been identified and dealt
with?
-Is there a plan to mitigate risks?
-Is feasibility based on evidence or assertions?