The 3 Types of Value Proposition
Value Proposition Competitive Analysis
There are 3 categories of value propositions:
1) Pain Killer
2) Vitamin or Lifestyle
3) Candy
Painkillers startups (Deep Tech, High Tech, Tech) provide a solution to a major critical problem (critical = problem that either affects a large number of people and/or is growing rapidly, or has dramatic consequences).
A Painkiller value proposition aims to solve a problem (ie bring a negative situation back to normal).
The promise of Vitamin startups is to improve what already exists. Lifestyle startups offer their community products in line with their philosophy, their values and therefore their way of life.
A Vitamin/Lifestyle value proposition therefore promises to improve what already exists and make you happy (ie bring a normal situation to a positive one).
This category of startups is embodied by the DNVBs (Digitally Native Vertical Brands).
Candy startups are those whose mission (through their value proposition) is to provide pleasure to their customers.
With few exceptions, the vast majority of startups and by extension their value propositions are not 100% Painkiller, Vitamin/Lifestyle or Candy. One of the dimensions will be predominant over the other two.
And depending on the category where the value proposition (PV) of your startup is predominant, you will not play the same game at all. But once you have identified your category, the competition (direct, indirect and alternative behaviors on the market) will be obvious to you because you finally have a benchmark.
1) Painkiller Value Proposition => Satisfaction of Utilitarian or Physiological Needs
2) Lifestyle/Vitamin Value Proposition => Satisfaction of Psychochological and/or Social Needs
The user/client job-to-be-done of Lifestyle/Vitamin businesses is in the Psycho-Social domain. By Psycho-Social, I mean deep human fear & desire and human-human interaction & relationship (the secondary Maslow's hierarchy of needs).
Lifestyle/Vitamin businesses are therefore the most difficult ones to evaluate for investors. That's why most investors focus on Pain-killer businesses (because it's easier to analyse the criticality of technical problems or health issues).
Lifestyle/Vitamin business founders should communicate to investors with a focus on:
-The real community they have (ie a community of users/clients with a tribal affection & relationship to the brand) and its dynamic of growth, + eventually the proof of pre/sales if any.
- Offer investors to eat/drink or experience the thing. But the founders should be ready for love or a hard rejection! The legend of Redbull says that blindtests performed on people during the initial market study, raised massive rejection. Don' t be offended if investors don't like your product, they are not the target.
Nevertheless, Lifestyle/Vitamin businesses could try to objectify their Value Proposition. If they can prove with a serious CX/UX research they make their clients happier for the job they want to achieve compared to direct or indirect value propositions or behaviors on the market, it's a win.
As example : the sales of Vitamin C (and you will understand why we call this category Vitamin)
Critical problem = serious health issue = Scurvy - Vit C deficiency leading to weakness, weight loss and general aches and pains. Longer-term depletion affects connective tissues, severe gum disease, and bleeding from the skin-
Painkiller Solution = Vitamin C
Out of that critical problem, the sales of Vitamin C to the general population is not solving any serious health issue. So what is the job-to-be-done Vitamin C tries to answer for people who buy it?
The job-to-be-done is a hope, the magical hope to not get a cold, the magical hope to have more energy. I say "magical" because it's nearly impossible to avoid to be infected by a virus (you can't wear a FFP2 mask 24/7!), and how can we scientifically determine what is it to have more energy? We don't have an energy bar above our head like a video game character.
So let's see what it means for people.
Why getting a cold has to be avoided?
Because if one gets cold, he can't work and the consequences are : less money (utilitarian need), can't take care of loved ones (psycho-social need), can't enjoy the good stuff of life during the illness period (hedonistic need).
Why having more energy is something wishable?
Because one with more energy can work more and the consequences are: more money (utilitarian need), buy more fun things - travel, restaurants, cinema ... - (hedonistic need), being able to take care of loved ones - children, old parents, spouse, husband - (psycho-social need).
Therefore, as you see, buying pills of Vit C is not done to help you cure your scorbut (you are not a pirate on a boat for long trip without any citrus fruit onboard), but to help you to become a better version of your normal self, a more valuable person for your loved ones (including your boss and co-workers).
If you can prove that your brand of Vit C is more loved by your clients to help them to become what they dream to become or at least to believe they can reach what they hope, well it's a win.
In the Vitamin/Lifestyle category, there is a negative zone (named Mix) where customers/users are dissatisfied / unhappy with the current situation, dissatisfied with the products (goods and/or services) existing on the market. This dissatisfaction can be assimilated to a problem which therefore requires a solution.
But there is a noticeable difference with a real Pain that would require a Painkiller solution.
In the case of a critical problem, for example, a fatal disease for which the best available treatment can increase the chances of survival only by a few months, when a new solution appears, a drug that allows the patient to survive 1 or 2 more years, the patient and his relatives are very satisfied and grateful with this new chance.
In the case where a startup tackles a Mix situation, the solution must be able to bring the situation back to normal (negative to 0) or even exceed expectations by going into the positive. Otherwise, if your solution doesn't achieve this feat, customers will continue to be dissatisfied and complain! Humans are ungrateful, but you have to deal with them (👉see this article HERE).
3) Candy Value Proposition => Dominated by Hedonic needs
Startup projects with a Candy value proposition are nearly impossible to pitch to investors!
"It's a place where people go to bet their money on games where they have very little chance of winning." => Casino.
"We want to produce and sell sweet, fruit-flavoured gelatin to children. Our product can damage teeth and promote type II diabetes." => Candy.
"We wanted to create a place where you will spend crazy amounts of money so that you can have fun without any intellectual or economic gain. A pure waste of time (and money)" => Amusement park.
"We created a bottle opener for beer bottles. Our bottle opener plays the voice of Homer Simpson when you open your bottle." => Homer Simpson bottle opener.
"I designed a video game for Smartphone where you play an angry bird destroying everything" => Game
The 3 Ultimate Reasons Why People Buy a Product
Dr. Ari Massoudi: https://www.linkedin.com/in/arimassoudi/