Alex Osterwalder explains the Value Proposition Canvas and how it fits into the Business Model Canvas. It's a way for companies to target how their products or services will address specific issues that their customer has. It creates a shared language and approach for conceptualizing the value proposition a company will offer the customer.

The Value Proposition Canvas maps out three aspects of a company's target customer:

  • The jobs of the target customer
  • The tasks the target customer are trying to fulfill
  • The pain the target customer is experiencing in doing these jobs and tasks


The Value Proposition Canvas

The Value Proposition Canvas is a zoom-in into two blocks of the Business Model Canvas. It takes the customers and it takes your value proposition; and why two pieces? Well basically you want to understand your customer right. So what if we had a map to describe our customers.

So we came up with this customer profile, very simple map with three components to better describe and understand, study customers map customers in an actionable way. So the three components. The jobs that are trying to get done, the tasks they are trying to fulfil. Then the pains that they have, anything that annoys them, that holds them back from doing a job well. And the gains that they are trying to get to materialize.

When you can describe the jobs, pains, and gains from your customers that’s when you really start understanding them in a very actionable way. Then you ask yourself, okay, what are my products and services that I want to offer? That’s pretty easy to do so we are looking at the value propositions.

But then what you really want to do is make it explicit how your products and services address some of those jobs, pains, and gains. So how do my products and services help alleviate my customers pains (that’s what we call pain relievers).

Then how do my products and services help my customers materialize some of those gains that the aim to achieve, right. So, when you have this map to describe your customer and to describe how your products and services are creating value, that’s when you can have you know, you can shape your ideas, you can have great conversations and you can track also that understanding.

So again like with the Business Model Canvas, created a map to make this topic that was really fuzzy more tangible. When you ask somebody, what’s value proposition, you’ll get 20 answers. But if you have a map to describe value propositions, you’ve created a shared language. That was our goal, what’s the map to describe value propositions with a shared language, so we can better design, challenge, test, and then build value propositions.