The value of a value proposition

In an overview of the third Catalyst Centre seminar led by Phil Sharpe, Mentor, Catalyst Centre, we deliberate the concept of value proposition and creating a competitive advantage.

Catalyst mentor Phil Sharpe oversaw the third seminar for our 2015 cohort of budding entrepreneurs. He used his session to discuss the notion of a value proposition and competitive advantage. In its simplest terms, a value proposition is a business statement that summarises the benefit you provide and why a consumer should buy your product or use your service over another. The fundamental core of a business’s value proposition should delve into the target consumer, the problems you solve, and how you solve these better than similar products on the market.

There’s no doubt that this is a daunting task but Phil stressed that unless it’s done, you’ll never have a successful business, let alone one that is worthy of investment. He advised our Catalyst Centre tenants to see the wood for the trees by referring to Value Proposition Design which is a tool many entrepreneurs use to arrive at a compelling value proposition. So, we caught up with some of the Catalyst Centre tenants to ask how they were feeling about this way of working.

Angus Webb, CEO of Catalyst Centre tenant Dynamon saw the benefits.  He said: “A workable value proposition is key to the success of a startup. It has been great that so much emphasis has been placed on creating and refining our value proposition here. I can also recognise the importance of refining my value proposition alongside my business growth.”

Phil Sharpe emphasised the importance of establishing a competitive advantage. He said: “To create this, he advises analysing the specific activities a company can partake in as a chain of value creating activities. This concept of a value chain was established by Michael Porter, a University Professor at The Institute for Strategy and Competitiveness at Harvard Business School. He identified a set of interrelated activities which are common to the majority of businesses as a start point. These include: inbound logistics, operations, services, outbound logistics, marketing and sales.

Simon Wickes, CEO of another tenant, Cynaptic, stressed: “Phil’s knowledge about the business model canvas, the need for looking at competition and the construction of value propositions has helped Cynaptic by providing focus to our activities. The seminar refined our thinking on the areas to target for an effective proposition and also the nuances and complications associated with our position in the value chain.”

Phil also emphasised the need for a solid, adaptable value proposition when applying for funding and grants, so that you can confidently approach investment when it is called for.

Laurence Pearce, CEO of xim commented: “We are finding the seminars stimulating and informative for our continued decision making. Our value proposition is constantly developing and evolving so the seminar gave us extra opportunities to discuss our value proposition with Phil, Peter and the rest of the cohort. During the same week we were applying for the SMART award from InnovateUK, and Phil helped us crystallise our grant application in parallel with our value proposition.”

So, as an entrepreneur, have you reviewed your value proposition recently? If not, there’s no time like the present. Watch out for our blog about intellectual property next week.