A lot of churning is happening in the Indian start-up landscape, the harsh phase in the recent past that includes funding crunch, mass layoffs, shutdowns, non-compliances of statutory requirements, poor performance at stock markets and so on. These cycles are bound to happen and there are many causes for the same.
To avoid such scenarios the founders should go to the basics – the idea and its scalability with minimum cash-burn. However, a great idea does not necessarily guarantee success.
In today’s environ, ideas become superlative business models almost overnight and the renowned corporate leader Mr. Jack Welch calls it “Buzzword”, while describing this phenomenon of fast-paced reputation building for companies.
Do all these alluring ideas become great scalable working business models? There are certain basic denominators to evaluate an idea.
The first and foremost is Compelling Value Proposition (CVP) and that will define your competitive positioning and differentiation. Businesses succeed or fail on their value proposition.
Most start-ups often visualise their product, service, technology or some value addition as their CVP and expect the same to disrupt the market.
No, it will not!
Instead, answer the question “What is the unmet need that I am trying to serve?” That is, the “pain” that your product / service is designed to address? And keep in mind that even before you created a way to address that particular need, the same would have been met in one way or another by the market. So, define exactly how your solution is novel or unique and will be able to address that particular need significantly better than existing ones. That is your CVP.
Though getting the right CVP is challenging it is an important exercise. Below are a few tips for building your right CVP and for standing out among the competition.
- Is there a real and unmet market need that your startup can address? First, start with a classic comparison list to determine if you can fill the space that exists
- Do a market research yourself and take the time to interact with your potential customers. You’ll receive the best feedback from those who would pay for your product
- Many times being first-to-market has significant advantages but not always. You can then introduce a superior product and leapfrog ahead
- A great way to differentiate yourself from the competition is on the features
Now is your idea a mere buzzword or will it compel a user to switch to your product or service?
Startup TN