5 Lessons from Business Accelerators – Part 2
This is part two of the post from 15 January.
Lesson 3: Figure out your Unique Value Proposition and test it with customers
Unique Value Proposition is often confused with elevator pitch, tagline, unique selling proposition, etc. They look like cousins of each other and I am not surprised because they are all about the benefits and value we bring to customers. Terminology aside, what is important is what the statement contains as this impacts on your selling power. You have probably heard this before but it is important to reiterate that customers don’t buy features, they buy value.
To demonstrate this, we played a game at Lightning Lab Manufacturing Accelerator with the start-up teams. We asked the teams “Why do you buy 3M post-it notes?” The answers were along the lines of “I can think more creatively” and “I can make mistakes and change easily”. These answers were nowhere near the features of 3M post-it notes – sticky, small in size, different colours.
To figure out your product/service’s unique value proposition, one of the exercises you can do is to start from the features of your product/service, then keep asking the “WHY” question multiple times (thanks Amanda Santos for this technique). Below is an example.
You ask: “Why do our customers buy into the feature of stickiness?”
Then you pretend to be the customer: “Because it allows me to stick notes on surfaces.”
You then ask “Why is it important that you can stick notes on surfaces?”
Then you stand in the customer’s shoes and say: “Because …” and so on.
I encourage you to keep exploring until you get to a statement that is similar to “I can think more creatively when I can stick notes on walls and move them around.” The statement should still be tangible and not as fluffy as “It makes me feel good when I am more creative.” or “It helps my business to increase revenue or decrease costs.” for business-related products/services.
Then the last step is to take this unique value proposition and test it with your actual customers and see if they validate it. If you have multiple value propositions for a particular customer segment, then test them with your customers and see which one they resonate with the most. Be mindful that different customer segments may buy into a different set of values and if so your messaging to each segment should be different.
Lesson 4: Communicate frequently and have granular tasks to help boost efficiency and collaboration
This is a lesson that I have learnt from using Scrum. Scrum is one of the frameworks under Agile. It is most commonly used in software development but it has recently been applied more widely to business in general.
A Scrum team typically sits together and is dedicated full-time on a project. To further help boost efficiency and collaboration, they also follow several rituals like Sprint Planning and Daily Stand-ups.
Sprint Planning is where the team plans for a time-box (“Sprint”) of no more than 4 weeks. The timeframe is less than 4 weeks because we as humans can only look forward with certainty for about a month. Since our longest inspect-and-adapt cycle is only 4 weeks, we can also respond to changes quickly.
During Sprint Planning, a goal is set for the sprint and the highest customer value items are picked off the backlog to match the goal. The team and product owner discuss thoroughly what each item means, what they are trying to achieve and what success looks like. Then the team members determine the tasks required and refine the tasks to a granular level so that each of them is no more than a day’s work.
We probably can all remember a piece of work or personal project that dragged on or was simply too big to get started. I have some prompting questions for you:
- Would it have changed things if you have broken down the project into smaller goals and granular tasks?
- What would have been the impact if you only had to plan for 4 weeks or less at a time?
- Would it have motivated you if you could see daily progress because your tasks move through on a daily basis?
- What would have been the impact on project flow and communication if your team was co-located and had dedicated time to work on the project together?
- What would have been the impact on project flow and communication if your team was co-located and had dedicated time to work on the project?
May be it is time to give that project another go?
Lesson 5: Focus, focus, focus
One piece of advice that I have been given time and time again by entrepreneurs and mentors is FOCUS. I am the type of person who by nature likes to have quite a bit going on. However, I am realising more and more that I won’t do good if I spread myself too thin. The same thing applies to businesses. This is especially true for start-ups where the to-do list stretches from this corner of the room until the moon. When there is a mountain of tasks to do with no direction, we get overwhelmed, demotivated or lost, all of which are not helpful for us to keep moving.
At the Lightning Lab Manufacturing Accelerator, start-ups only had 13 weeks to develop a business and pitch in front of investors. Having a focus for each week and each day became forever more important.
So we decided to have weekly Sprints. At each of the Sprint Planning, I asked the start-ups two questions: “What is your goal of the week?” and “What is the biggest business assumption that you need to tackle this week?”. For a good part of the Accelerator, the start-ups’ weekly goals were gaining customer validation. The tasks that followed were talking to customers, taking prototypes and unique value propositions to test with customers. Often their biggest business assumption also matched with their weekly goal, e.g. “assuming that we have customers who are willing to buy”. When this was the case, the team knew their focus was customers. When their biggest business assumption and their goal of the week differed, I made sure they picked a primary focus because it is important to know when push comes to shove, what the focus should be.
Two questions for you:
- What is your focus/goal of the day or the week?
- Are you doing what is required to achieve the goal or are you doing something else?
If you have any questions or comments regarding this blog post, please leave a comment here or email me.