How to create products and

services customers want.

Get started with…

Value
Proposition
Design
strategyzer.com/vpd
Written by
Alex Osterwalder
Yves Pigneur
Greg Bernarda Series
Alan Smith Sequel to
Business Model Generation
Designed by International Bestseller
Trish Papadakos 30+ Languages
1. Canvas 2. Design 3. Test 4. Evolve
1.1 Customer Profile 10 2.1 Prototyping Possibilities 74 3.1 What to Test 188 Create Alignment 260
1.2 Value Map 26 2.2 Starting Points 86 3.2 Testing Step-by-Step 196 Measure & Monitor 262
1.3 Fit 40 2.3 Understanding Customers 104 3.3 Experiment Library 214 Improve Relentlessly 264
2.4 Making Choices 120 3.4 Bringing It All Together 238 Reinvent Yourself Constantly 266
2.5 Finding the Right Business Model 142 Taobao: reinventing (E-)commerce 268
2.6 Designing in Established Organizations 158

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 You’ll love Value Proposition
Design if you’ve been…
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BL AH
BLAH
BLAH
BLAH

Overwhelmed by the task of true
value creation
Sometimes you feel like…
ǃɲ There should be better tools available to help you create value
for your customers and your business.
ǃɲ You might be pursuing the wrong tasks and you feel insecure
about the next steps.
ǃɲ It’s difficult to learn what customers really want.
ǃɲ The information and data you get from (potential) customers is
overwhelming and you don’t know how to best organize it.
ǃɲ It’s challenging to go beyond products and features toward a
deep understanding of customer value creation.
ǃɲ You lack the big picture of how all the puzzle pieces fit
together.
Frustrated by unproductive Involved in bold shiny projects
meetings and misaligned teams that blew up Disappointed
You have experienced teams that… You have seen projects that… by the failure
of a good idea.
ǃɲ Lacked a shared language and a shared understanding of ǃɲ Were big bold bets that failed and wasted a lot money.
customer value creation. ǃɲ Put energy into polishing and refining a business plan until it
ǃɲ Got bogged down by unproductive meetings with tons of perpetuated the illusion that it could actually work.
unstructured “blah blah blah” conversations. ǃɲ Spent a lot of time building detailed spreadsheets that were Get “From Failure to Success” poster
ǃɲ Worked without clear processes and tools. completely made up and turned out to be wrong.
ǃɲ Were focused mainly on technologies, products, and features ǃɲ Spent more time developing and debating ideas rather than
rather than customers. testing them with customers and stakeholders.
ǃɲ Conducted meetings that drained energy and ended without a ǃɲ Let opinions dominate over facts from the field.
clear outcome. ǃɲ Lacked clear processes and tools to minimize risk.
ǃɲ Were misaligned. ǃɲ Used processes suited for running a business rather than ones
for developing new ideas.
 Value Proposition Design
will help you successfully...

VIII IX
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New Way
Understand the patterns
of value creation
Organize information about what customers want in a simple
way that make the patterns of value creation easily visible. As
a result, you will more effectively design value propositions and
profitable business models that directly target your customers’
most pressing and important jobs, pains, and gains.
Leverage the experience and skills
of your team
Equip your team with a shared language to overcome “blah blah
blah,” conduct more strategic conversations, run creative exer-
cises, and get aligned. This will lead to more enjoyable meetings
that are full of energy and produce actionable outcomes beyond
a focus on technology, products, and features toward creating
value for your customers and your business.
Get your team aligned.
Design, test,
Avoid wasting time with ideas that and deliver what
won’t work
customers want.
Relentlessly test the most important hypotheses underlying
your business ideas in order to reduce the risk of failure. This will Get “From Failure to Success” poster
allow you to pursue big bold ideas without having to break the
bank. Your processes to shape new ideas will be fit for the task
and complement your existing processes that help you run your
business.
Minimize the risk of a flop.

Gain clarity.
 Our Value Proposition
Helps create
products and

to You
services
people want
Integrates with
other business Minimizes risk

The links you see on the

How to create products and methods of (big) failure
services customers want.
Get started with…
X XI
Value
side of every page point
Apply
Integrated with the Helps
Proposition
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Succeed!
Design Business Model Canvas understand

to resources in the online

strategyzer.com/vpd
Written by
Alex Osterwalder
what matters
Yves Pigneur

to customers
Greg Bernarda Series
Alan Smith Sequel to
Business Model Generation
Designed by International Bestseller

companion.
Trish Papadakos 30+ Languages

VPD Book Helps Proven and effective

+ shape ideas suite of business tools
VPD Online Companion
Watch for the Access to advanced

Strategyzer logo
material and knowledge

and follow the link to

Engaging online
2 3 multimedia content

online exercises,
Software-
supported Practical, visual +

tools/templates,
methodology enjoyable format
Shared language

posters and more.

to communicate
and collaborate Share with and
learn from peers
Enables practice + skills
Note: To gain access to these exclusive online portions of Value Proposition Brief, clear (self-)assessment

Learn
Design, you'll need to prove you own the book. Keep the book near you to and applicable Instructions
help you answer the secret questions and verify your ownership! content avoids to get started
confusion

Web App + Online Courses

Go further with pro tools and courses
 The Tools and Process of
Value Proposition Design
The heart of Value Proposition Design is about applying
Tools to the messy Search for value propositions that
customers want and then keeping them aligned with what
customers want in Post-search.

XII Zoom out Value Proposition Design shows you how to use the Value XIII
Proposition Canvas to Design and Test great value propo-
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sitions in an iterative search for what customers want. Value
proposition design is a never-ending process in which you
need to Evolve your value proposition(s) constantly to keep
it relevant to customers.

Progress
Manage the messy and nonlinear
process of value proposition design and
reduce risk by systematically applying
adequate tools and processes.
Zoom in

Canvas Design / Test Evolve

Tools Search Post-search

Design Squiggle adapted from Damien Newman, Central

 An Integrated Zoom out

Suite of Tools
The Value Proposition Canvas is the The
XIV
tool at the center of this book. It makes
value propositions visible and tangible Environment Map XV
and thus easier to discuss and manage.
helps you understand the context
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It perfectly integrates with the Business
Model Canvas and the Environment
Map, two tools that are discussed in
detail in Business Model Generation,*
in which you create.
the sister book to this one. Together,
they shape the foundation of a suite
of business tools.
The
Business Model Canvas
helps you
create value for your business.

The
The Value Proposition Canvas zooms Value Proposition Canvas
into the details of two of the building
blocks of the Business Model Canvas. helps you
create value for your customer.
Zoom in
* Business Model Generation, Osterwalder and Pigneur, 2010.
 Refresher: The Business Model Canvas
XVI
STRATEGYZER.COM / VPD / INTRO
Embed your value proposition in a Customer Segments
viable business model to capture value are the groups of people and/or orga-
for your organization. To do so, you nizations a company or organization
can use the Business Model Canvas, a aims to reach and create value for
tool to describe how your organization with a dedicated Value Proposition.
creates, delivers, and captures value.
The Business Model, and Value Propo- Value Propositions
sition Canvas perfectly integrate, with are based on a bundle of products
the latter being like a plug-in to the and services that create value for a
former that allows you to zoom into Customer Segment.
the details of how you are creating
value for customers. Channels
describe how a Value Proposition is
The refresher of the Business Model communicated and delivered to a
Canvas on this spread is sufficient to Customer Segment through commu-
work through this book and create nication, distribution, and sales
great value propositions. Go to the Channels.
online resources if you are interested
in more or get Business Model Genera- Customer Relationships
tion,* the sister publication to this book. outline what type of relationship is
established and maintained with
each Customer Segment, and they
explain how customers are acquired
and retained.
Revenue Streams
result from a Value Proposition
successfully offered to a Customer
* Business Model Generation (2010), Osterwalder and Pigneur
Designed for: Designed by: Date: Version:
The Business Model Canvas
Key Partners Key Activities Value Propositions Customer Relationships Customer Segments XVII
STRATEGYZER.COM / VPD / INTRO
Segment. It is how an organization
captures value with a price that
customers are willing to pay.
Key Resources
are the most important assets
required to offer and deliver the previ-
ously described elements. Key Resources Channels
Key Activities
are the most important activities an
organization needs to perform well.
Key Partnerships
shows the network of suppliers
and partners that bring in external
resources and activities.
Cost Structure Revenue Streams
Cost Structure
describes all costs incurred to oper-
ate a business model.
Profit
is calculated by subtracting the
total of all costs in the Cost Struc- designed by: Business Model Foundry AG
The makers of Business Model Generation and Strategyzer
ture from the total of all Revenue This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:
http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com
Streams.
Download detailed Business Model Canvas Explanation and the Business Model Canvas pdf
 C
Unit

Value Proposition
B
Unit
A
Unit

Design works for…

XVIII
STRATEGYZER.COM / VPD / INTRO
Are you creating something from scratch on your own or New Ventures Established
are you part of an existing organization? Some things will Individuals or teams setting out to Organizations
be easier and some harder depending on your strategic create a great value proposition Teams within existing companies XIX
playground. and business model from scratch setting out to improve or invent value

STRATEGYZER.COM / VPD / INTRO

A start-up entrepreneur deals with different constraints than a project propositions and business models
leader for a new venture within an existing organization. The tools presented P rocess

in this book apply to both contexts. Depending on your starting point you will
execute them in a different way to leverage different strengths and overcome
different obstacles.
Main challenges
ǃɲ Produce proof that your ideas can
work on a limited budget.
ǃɲ Manage involvement of investors
(if you scale your ideas).
ǃɲ Risk running out of money before
finding the right value proposition
and business model.
Main opportunities
ǃɲ Use speedy decision making and
agility to your advantage.
ǃɲ Leverage the motivation of owner-
ship as a driver for success.
Get “Innovating in Established
Organizations” poster
Main opportunities Main challenges
ǃɲ Build on existing value proposi- ǃɲ Get buy-in from top management.
tions and business models. ǃɲ Get access to existing resources.
ǃɲ Leverage existing assets (sales, ǃɲ Manage cannibalization.
channels, brand, etc.). ǃɲ Overcome risk aversion.
ǃɲ Build portfolios of business ǃɲ Overcome rigid and slow processes.
models and value propositions. ǃɲ Produce big wins to move the needle.
ǃɲ Manage career risk of innovators.
 Use Value Proposition
Design to…
invent and improve value propositions. The tools we will
study work for managing and renewing value propositions
XX (and business models) just as much as for creating new XXI
ones. Put the Value Proposition and Business Model to work
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to create a shared language of value creation in your orga-
nization. Use them to continuously invent and improve value
propositions that meet customer profiles, which is an under-
taking that never ends.

C
Unit
B
Unit
A
Unit

P rocess

Invent Improve
Invent new value propositions that people want Manage, measure, challenge, improve, and renew
with business models that work. existing value propositions and business models.
 Assess
Your Value
Proposition
XXII Design Skills XXIII
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Complete our online test and assess
whether you have the attitude and
skills required to systematically be
successful at value proposition design.
Take the test before and after working
through Value Proposition Design to
measure your progress.

Take your skills test online

Entrepreneurial Tool Design Thinking Customer Experimentation

Knowledge
You enjoy trying out new things. You don’t see the
risk of failing as a threat but an opportunity to
learn and progress. You easily navigate between
the strategic and the tactical.
Skills
You systematically use the Value Proposition
Canvas, Business Model Canvas, and other tools
and processes in your search for great value prop-
ositions and business models.
Skills
You explore multiple alternatives before pick-
ing and refining a particular direction. You are
comfortable with the nonlinear and iterative
nature of value creation.
Empathy
You relentlessly take a customer perspective and
are even better at listening to customers then
selling to them.
Skills
You systematically seek evidence that supports
your ideas and tests your vision. You experiment
at the earliest stages to learn what works and
what doesn’t.
 Sell Your Colleagues on concerned that we don’t have

Value Proposition Design

a methodology to track our
progress on the development
of that new value proposition So, what if
and business model.
we tried out the
Value Proposition
XXIV XXV
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CCanvas
nv s ((and BBusiness
s ss
worried that we focus too much on
products and features instead of
astonished at how poorly
aligned product development,
Model
Mo C v s) in oour
Canvas) r
creating value for customers. sales, and marketing are when surprised at how often we next project?
xt proj ct?
it comes to developing new make stuff nobody wants,
value propositions. despite our good ideas and
good intentions.

I am…
really disappointed by The Value Proposition Canvas

how much we talked blown away by how Value Proposition

Customer Segment

about value propositions unclear that last amazed by how many

Gain Creators

and business models at presentation on that resources we wasted when

Gains

Products
& Services

our last meeting without new value proposi- that great idea in that last Customer
Job(s)

really getting tangible tion and business business plan turned out to be Pain Relievers
Pains

results. model was. a flop because we didn’t test it.

Copyright Business Model
Foundry AG
The makers of Business Model
Generation and Strategyzer

strategyzer.com

Date: Version:
Designed by:
Designed for:

The Business Model Canvas

Customer Relationships Customer Segments
Key Activities Value Propositions
Key Partners

Channels
Key Resources

concerned that our product surprised that we invest

Revenue Streams
Cost Structure

development process doesn’t so much in research and not sure if everybody in

designed by: Business Model Foundry AG
The makers of Business Model Generation and Strategyzer strategyzer.com
view a copy of this license, visit:
Attribution-Share Alike 3.0 Unported License. To
This work is licensed under the Creative Commons Street, Suite 300, San Francisco, California, 94105,
USA.
or send a letter to Creative Commons, 171 Second
http://creativecommons.org/licenses/by-sa/3.0/

use a more customer-focused development (R&D), but fail our team has a shared
methodology. to invest in developing the understanding of what a good
right value propositions and value proposition actually is.
business models. Get a slide deck with 10 arguments to use the Value Proposition and Business Model Canvases
can vas
 The Value Proposition Canvas has two sides.

1
With the Customer Profile p. 10 you clarify
your customer understanding. With the
Value Map p. 26 you describe how you intend
to create value for that customer. You
achieve Fit p. 40 between the two when one
meets the other.