Value Proposition Canvas and Business Model Canvas Notes

Module 1: Value Proposition Canvas (VPC) and Business Model Canvas (BMC)

Overview

  • Understanding the VPC and its role in addressing customer needs.
  • Exploring the BMC and how it connects to VPC insights.
  • Learning from case studies and success stories.
  • Engaging in hands-on activities for deeper understanding.

Objectives

  • Introduce VPC and BMC.
  • Provide tools to help academics navigate entrepreneurship and intrapreneurship.
  • Enable academics to contribute innovative ideas and research that can solve real-world problems.
  • Recognize that technopreneurship AMPLIFIES this impact.
  • Applying tools to business ideas

Introduction: Transitioning into Business Entrepreneurship and Intrapreneurship

  • What it is and isn't.
  • Exploration and Operation.
  • Challenges academics face.
  • Key mindset shift.
  • Skills and competencies needed.
  • Paths for transition.
  • Support systems.
  • Steps for transition.
  • Benefits of transition.

Value Proposition Canvas (VPC)

  • Definition: A tool for aligning products/services with customer needs.
    • A visual tool designed to align your offering with customer needs.
    • Crucial for identifying what customers value.
    • Helps create tailored solutions that address their gains, pains, and jobs-to-be-done.

Why VPC Matters

  • The VPC provides focus to research work.
    • Provides clear channels on:
      • Customer-centric design and shaping of solutions.
      • Tailored solutions.
      • Reduction of risks.
    • Focus, Tailored Customer-centric design, Risk Reduction

Components of VPC

  • Customer Segments: Gain, Pain, Jobs
  • Value Map: Gain Creators, Pain Relievers, Products/Services
  • CUSTOMER VALUE

Benefits of using VPC

  1. Clarifies Customer Needs
    • Businesses understand target audience by mapping out customer pains, gains, and jobs.
    • Ensures products/services address real problems and fulfill specific desires.
    • Leads to better alignment with customer expectations.
  2. Enhances Product-Market Fit
    • Aligning customer profile with the value proposition ensures offerings meet market demands.
    • Reduces the risk of developing solutions.
    • Increases likelihood of success.
  3. Boosts Creativity and Innovation
    • Encourages businesses to think creatively and explore unique ways to deliver value.
    • Facilitates brainstorming and innovative thinking.
    • Identify gaps/opportunities in the current value proposition.
  4. Improves Communication Across Teams
    • VPC’s visual nature of the canvas simplifies complex ideas.
    • Shares a clear understanding of the value proposition.
    • Facilitates better collaboration across departments (e.g., marketing, product development, and sales).

Customer Gain

  • Fundamental outcomes customers expect. Value proposition irrelevant without them
    • E.g. a software product should simply work as advertised
    • REQUIRED
  • Not strictly necessary Anticipated as part of the experience. E.g. user-friendly interfaces or helpful customer support, which enhance satisfaction
    • EXPECTED
  • Reflect customers' aspirations and ideal outcomes truly delight them. E,g, faster delivery, cutting-edge features, or a solution that makes them feel unique.
    • DESIRED
  • Unanticipated benefits that surprise and impress the client. "wow factor" E.g. product helps save even more time than expected,
    • UNEXEPCTED

Customer Pain

  • Difficulties clients encounter in their tasks or workflows. E.g. time- consuming processes, unreliable technology, or lack of resources.
    • FUNCTIONAL
  • How do these pains make the client feel? Stress, frustration, or even fear could be linked to their struggle. It's crucial to empathize with these emotions
    • EMOTIONAL
  • Costs and losses related to their challenges—be it financial strain, wasted investments, or missed opportunities
    • FINANCIAL
  • These include impacts on social standing or relationships, such as reputational damage or difficulty in collaboration.
    • SOCIAL
  • Concerns related to uncertainty or potential losses, like security vulnerabilities or unpredictable outcomes.
    • RISK

Customer Jobs

  • Practical tasks/problems customers are trying to solve. E.g. buying groceries, assembling furniture, or managing a project efficiently
    • FUNCTIONAL
  • Customers' desire for status, social acceptance, or recognition. E.g. using a product to appear more professional or fashionable among peers.
    • SOCIAL
  • Emotional satisfaction or reducing negative feelings. Include seeking stress- free vacation, enhancing personal well-being, peace of mind.
    • EMOTIONAL
  • Secondary tasks that assist customers in performing their primary jobs. For example, researching a product or maintaining a tool
    • SUPPORT

ACTIVITY 1: IDENTIFY GAINS, PAINS, JOBS

  • Identify a Customer Gains, Pains, Jobs
  • In your groups of 4, you will be assigned one potential client
  • Identify their Gans, Pains, and Jobs based on Desktop Research
  • List these
  • Present to other teams and get feedback

GAIN CREATORS

  • Fundamental outcomes customers expect. Value proposition irrelevant without them
    • E.g. a software product should simply work as advertised
    • REQUIRED
  • Not strictly necessary Anticipated as part of the experience. e.g. user-friendly interfaces or helpful customer support, which enhance satisfaction
    • EXPECTED
  • Reflect customers' aspirations and ideal outcomes truly delight them. E,g, faster delivery, cutting-edge features, or a solution that makes them feel unique.
    • DESIRED
  • Unanticipated benefits that surprise and impress the client. "wow factor" E.g. product helps save even more time than expected,
    • UNEXEPCTED

PAIN RELIEVERS

  • Fundamental outcomes customers expect. Value proposition irrelevant without them
    • E.g. a software product should simply work as advertised
    • REQUIRED
  • Not strictly necessary Anticipated as part of the experience. e.g. user-friendly interfaces or helpful customer support, which enhance satisfaction
    • EXPECTED
  • Reflect customers' aspirations and ideal outcomes truly delight them. E,g, faster delivery, cutting-edge features, or a solution that makes them feel unique.
    • DESIRED
  • Unanticipated benefits that surprise and impress the client. "wow factor" E.g. product helps save even more time than expected,
    • UNEXEPCTED

PRODUCTS/SERVICES

  • primary offerings directly address the customers' needs. E.g. fitness app provides workouts and tracking features as its core value.
    • CORE PRODUCTS/SE RVICES
  • enhance the core offerings and provide additional value. E.g. a customer support hotline or a maintenance package accompanying a product.
    • SUPPORTING PRODUCTS/ SERVICES
  • extras that add to the overall experience and satisfaction, even if they’re not central to the core function.
    • COMPLEMENTARY PRODUCTS/ SERVICES

CASE STUDY: VPC In Action

  • Reaction, Satisfaction, And Intention
  • Knowledge Retention
  • Application And Implementation
  • Business Impact
  • Return On Investment

ACTIVITY 2: ROLE PLAYING

  • Role-play a scenario in UTHM
  • One group play the role of a team from UTHM staff asked to improve productivity, another play the role of UTHM Management trying improve productivity
  • Grp 1 discuss their Gain, Pains and Jobs; Grp 2 listens, asks questions and prepare Gain Creators and Pain Relievers
  • Work in your teams
  • Present to other teams

ACTIVITY 3: MINI VPC

  • Complete a Value Proposition Canvas
  • In your groups of 4, select one research outcome to commercialise
  • Create the VPC for that specific outcome
  • Work in your teams
  • Present to other teams

COMMON MISTAKES WITH VPC

  • Customer segments? Plenty. Yet there are times when customer analysis oversimplifies types of customers there are.
  • Too focused on the benefits the idea/product/service can bring, but not on the Pains the Customer has. As well as their Appetite to pay.
  • Customers will give feedback if they care, either intrinsically or extrinsically. Listen to the feedback, then decide on next action.
    • Overgeneralising
    • Focusing too narrowly on Gains
    • Neglecting iterative feedback

ACTIVITY 4: MINI VPC

  • Complete a Value Proposition Canvas
  • Pretend you are a small business that have identified the need for affordable, on-the-go meals for UTHM staff due to the VC’s ‘Keberadaan’ Policy
  • Create the VPC for that specific outcome
  • Work in your teams
  • Present to other teams

Transition to Business Model Canvas

  • VPC insights Feed SEAMLESSLY into BMC
  • Translate Customer understanding => holistic business strategy
  • VPC Key elements? BMC Key elements?

VPC to BMC: The transition matters

  • Linking value creation to broader business strategy

Business Model Canvas (BMC)

  • Definition
    • A tool to describe, design and innovate business models
    • BMC helps map out key components of a business
    • Helps align all aspects with customer value

9 Building Blocks of BMC

  • Key Partners: Business supporters
  • Key Activities: Critical tasks
  • Value Proposition: Reason chosen
  • Customer Relationships: Get/retain clients
  • Channels: Audience reached
  • Customer Segments: Clients served
  • Cost Structure: Costs incurred
  • Revenue Streams: Income generation
  • Key Resources: Crucial assets

ACTIVITY 5: DIFFERENCE BETWEEN BMC AND VPC?

  • Identify differences between VPC and BMC
  • In your groups, identify what are the similarities and differences between the two
  • Why do these differences matter?
  • Work in your teams
  • Present to other teams

DIFFERENCE BETWEEN BMC AND VPC?

  • VPC => customer needs and alignment
  • BMC => broadens focus include entire business ecosystem
  • MINOR DIFFERENCES ???

ACTIVITY 6: INTERACTIVE WORKSHOP

  • Go from a VPC to a BMC
  • In your groups, identify what are the similarities and differences between the two
  • Why do these differences matter?
  • Work in your teams
  • Present to other teams

9 BUILDING BLOCKS

  • KEY PARTNERS
    • Who are your allies?
  • KEY ACTIVITIES
    • What critical tasks sustain operations?
  • VALUE PROPOSITION
    • Why do customers choose you?

9 BUILDING BLOCKS

  • CUSTOMER RELATIONSHIPS
    • How do you engage with customers?
  • CHANNELS
    • How do you reach your customers?
  • CUSTOMER SEGMENTS
    • Who do you serve?

9 BUILDING BLOCKS

  • COST STRUCTURE
    • What are the costs involved?
  • REVENUE STREAMS
    • How do you make your money?
  • KEY RESOURCES
    • What assets are vital to operations?

ACTIVITY 6: CASE STUDY: BMC in ACTION

  • Map out a BMC
  • Your groups are competing consultants to an academic startup creating online courses
  • Partnerships, Activities, Revenue Stream
  • Work in your teams, to identify practical applications of research
  • Present to other teams

Building VPC for a hypothetical academic venture

  • What is your current research venture?

Importance of Validation

  • Ensuring Functional Correctness
  • Identifying Defects and Errors
  • Enhancing User Experience
  • Mitigating Risks
  • Compliance with Standards and Regulations

Validation is Critical

  • Test assumptions via market feedback
  • Surveys, interviews, prototypes, and sandbox approach

Pivoting Based on Feedback

Validation is Critical

  • Test assumptions via market feedback
  • Surveys, interviews, prototypes, and sandbox approach

Signs to Pivot

  • Market Trends
  • Technological Advancements
  • Customer Feedback
  • Regulatory Changes
  • Financial Performance
  • Internal Challenges
  • Competitor Movement
  • Supply Chain Disruptions
  • Channels that provide info on when to pivot

When to Shift Your Business Strategy

  • Market Feedback
  • Financial Health
  • Competitive Landscape
  • Regulatory Changes
  • Internal Capabilities
  • Channels that provide info on when to pivot

BMC during a Pivot

  • Exploring the Nine Building Blocks of BMC During a Pivot

Channels that provide info on when to pivot

Measure Impact of Pivot

  • Measuring the Impact of Your Pivot on Business Performance
  • Channels that provide info on when to pivot

Financial Implications

  • Financial Implications of Pivoting
  • Channels that provide info on when to pivot

Flexibility

  • Embracing Flexibility in Business Planning
  • Channels that provide info on when to pivot

ACTIVITY 7. CASE STUDY: VPC and BMC in ACTION

  • Map out a VPC and its BMC
  • Refer to Activity 3 for your research-based product/service
  • Build your VPC and BMC in sequence
  • Work in your teams, to validate the customer and pivoting
  • Present to other teams

Tools and Resources

  • Channels that provide info on when to pivot
  • Software: Canva, Strategyzer, Miro “Business Model Generation” Alexander Osterwalder
  • Latest Research

Challenges

  • Channels that provide info on when to pivot
    • Personality Fear of Failure
    • Sociology
    • Focus on knowledge exploration
    • Lower risk Lack of Business Experience
    • Sociology
    • Info Search Mentorship and Networking

Benefits of Academic-driven Startups

  • Channels that provide info on when to pivot

Success Storied

  • Channels that provide info on when to pivot

Recap and Takeaways

  • Channels that provide info on when to pivot
    • VPC tailors offerings to customer needs
    • BMC integrates those into a business strategy
    • Apply VPC and BMC to your own research ideas