Qualitative vs Quantitative Value

There are pitch decks for raising money, outlining the vision of the company, selling the product, recruiting partners for product integration etc.  In an early stage company pitch decks often focus on the product and company vision which makes sense. A business wrapped around the product is key so it is important to ensure the business opportunity is clear to your audience.

I have seen a number of companies try to build a business purely around a qualitative value prop which is hard and has a higher likelihood of failure. The market is less willing to pay for a better user experience or the promise of increased engagement, even if they like the product and find it useful.

A quantitative value (lowers cost, drives revenue, more customers etc.) dramatically increases the odds of success. As I pointed out in my post re Stages of Commercialization, the role of a good BD person at the early stage of a company should be to drive this process which includes talking to prospective customers and partners.

One way to remember this rule is the pacemaker versus the hearing aid, if you could only have one, which one would you choose?

pacemaker

You may have a value prop to users and another to customers (e.g. Facebook provides a qualitative value to consumers and quantitative value to advertisers).

The biggest challenge I see companies face is being candid about their value. The time and energy in building a product creates an emotional attachment that can make it difficult to step back and quantify the benefit a customer or partner will receive but it is worthwhile to do in the early stages of development.

Learn more http://www.ericgrafstrom.com/

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