Value Proposition Design by Alexander Osterwalder et al

by Paul Simister on May 19, 2015

Value Proposition Design: How to Create Products and Services Customers Want (Strategyzer) is written by Alexander Osterwalder, Yves Pigneur, Gregory Bernarda, Alan Smith and designed by Trish Papadakos.

This is a very stylish book, starting with the front and back covers which show the effects of good and bad value proposition designs repectively. It also includes access to online templates and exercises.

It is a follow-up to their earlier book Business Model Generation.

Does the style overwhelm the substance?

It makes some excellent points:

  1.  value proposition design is messy and ongoing as you learn and your customers and competitors adapt.
  2. the methodology brings together the environment, the business model and the value proposition through the use of stylised templates that force you to consider issues to avoid empty spaces on the forms.
  3. there are detailed instructions on how to fill in the templates although these have to be generic and you can expect difficulties when you apply the techniques to specific situations.
  4. it emphasises fit between customers, the product and the business model. This should be common sense but alas, in the real world, this is where problems emerge.
  5. it can bring together the product development team focused on a shared vision and mental model.
  6. it is flexible and doesn’t have a bias towards manufacturing or any other particular type of business.

Unfortunately I also think there are issues which may mean that the book isn’t suitable for you:

  1. It’s not easy to read and understand. As it is a manual for creating change, the instructions for filling in the forms feel like technical work. Despite my intense interest in the subject, I pre-ordered the book, started it the day it was delivered and then put it to one side. I found I was reluctant to go back to it. I forced myself but since too many management books are bought, started but never finished, I fear that this will add to the pile of well meaning purchases.
  2. I have a fear that the process may take over from genuine insight and inspiration that can link together customer pain symptoms, diagnosis and solutions. I suspect that filling in the forms become an end in itself which gets the project team excited but doesn’t fire up enthusiasm elsewhere.
  3. It’s more suited to big businesses than small businesses in my opinion.
  4. It’s big on concept and it has a strong logical appeal but, if you like the methodology, it pulls you into spending more money with the authors.
  5. Don’t get this on kindle. I believe you need the physical book to get the best out of it.

As I was reviewing the book, I was left with an uneasy feeling. I have great sympathy for the objectives of the authors. Effective value propositions are essential if businesses are going to succeed and everything that is done to encourage entrepreneurs to carefully think through the opportunity should be applauded.

Perhaps part of my problem is the “not invented here” syndrome. This is not how I do it and while I’ll read some books and pick up ideas to incorporate into my methodology, this leaves me cold.

An easy framework I use to help look at value proposition is across the three big business risks
1) Is there genuine customer demand? A real problem that customers will be willing to pay to solve?
2) Is the business able to withstand current and future competition? Does it have some kind of advantage that can be sustained?
3) Does the business have the capabilities to consistently deliver on its marketing promises?

The book looks great and judging by its popularity, many people love the book but I’m really puzzled to understand why.

You can find out more details at Amazon.com and Amazon.co.uk (affiliate links)

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