The Value Mix: Create Meaningful Products and Services for Your Audience is a book by Guerric de Ternay. I invited Guerric to join us for an interview. The topic is business design and value proposition design!
Those topics are the foundation of any business and business model. Let’s jump to it!
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Interview at Guerric de Ternay on value proposition design
Glad to have you for this interview Guerric!
Would you mind telling us a bit more about how you got to become a “business designer”?
Thanks for inviting me, Gennaro.
This includes both the high-level strategy (purpose, vision, business modeling, financial planning, brand positioning, etc.) and the execution strategy (prototyping, customer experience, product roadmap, customer acquisition & retention, etc.).
Therefore, business designers are quite generalists. They need to master a broad range of business tools and frameworks in finance, design, and marketing, and must also have a sense of industry knowledge.
In general, business designers are entrepreneurs, product managers, or innovation consultants—and also genuinely curious people.
My advice would be to seek opportunities to build an extensive understanding of business and product design.
In my case, I focused on many various skills:
- Programming and graphic design when I was a teenager and started a digital marketing agency.
- Legal studies as I went to law school.
- Business and management when I studied at London Business School.
- Sales, marketing, and operations by running two sustainable fashion brands—GoudronBlanc and Blackwood.
- And putting everything together in my work as an innovation consultant at ?What If!.
Most of the people I’ve met who can fit the definition of “business designer” are passionate about what they do, reflective, but also proactive—they do not hesitate to get their hands dirty.
In business we all talk about value and value proposition, what’s a good definition of value according to you?
There are two definitions of value in business:
- The value of a company for the shareholders and
- The value of a product or service from the perspective of a customer—the value proposition.
In the sense of creating value for your customers, value is a matter of perception.
Here’s a good definition of value:
The perception of the benefits that a customer gets from buying, using, or consuming a specific product or service in comparison with available alternatives.
People buy and use a product or service when they believe it will create value for them, i.e., serve them better than all the other available alternative.
In your book, The Value Mix, you break down value as the encounter of an audience with a proposition. How would you break down this matrix for our audience?
Yes. Value is a combination of two things:
- What your target audience need and want
- What you are offering to the market to help your audience fulfill their needs and desires—this is your proposition.
I like using these words—”audience” and “proposition”—because they go beyond the ideas of “customers” and “products.”
An audience includes customers, users, and advocates (people who may never buy or use your proposition but will influence the decisions of others).
A proposition is what you propose/offer to your audience. It’s not just a product. It’s also all the experience of buying and using what you’re selling.
How important is the context in building up a product or service?
Context influences how much value your audience puts into things. It dictates what they buy and how much they’re willing to pay for it.
If it’s raining heavily and I’m in a business district on my way to a meeting, I’d be immediately considering buying an umbrella on the spot or hailing a cab.
If I have a flower shop, I’d be interested in knowing when is the marriage anniversary of my customers. Husbands are more likely to buy flowers on that date. As a florist, I could help them be thoughtful husbands.
What questions should an entrepreneur ask to build a successful business?
Entrepreneurs and product managers work with limited resources. To design and implement the strategy of a successful business, they have to make tough choices.
One of my professors at London Business School, Costas Markides, summarises the structure of a business model using three simple questions:
As he explained, a strategy is about making tough choices on three dimensions:
- Who = the customers you will focus on and those you will consciously not target;
- What = the products you will offer and the ones you will not offer;
- How = the activities you will perform and the ones you will not perform.
Besides your book, The Value Mix, what business book would you suggest to the FourWeekMBA audience?
Tough question, Gennaro.
I believe the goal of any business book is to help you progress.
The best business book for a specific person will depend on their situations and the challenges they are facing. For example, I wrote The Value Mix for entrepreneurs and product managers who face the challenge of having to create or improve a value proposition.
That being said, there’s a book I often recommend to executives: Deep Work.
Distraction and shallow work are two of the biggest challenges for any businessperson. Deep Work is an eye-opener and offers some ideas on how to be more focused on doing the work that matters.
I shared some more thoughts on the book in my newsletter, here.
Who’s your favorite business author (if any)?
The work of Seth Godin, especially his blog, has inspired me a lot. I often think that he’s done a great job at bridging business thinking and poetry.
I also really like Fred Wilson’s daily blog called avc.com and the writing of Rory Sutherland for The Spectator.
What person do you follow the most when it comes to business model innovation?
The most important when it comes to business model innovation is observing. So rather than following a business thinker, I prefer to immerse myself with new stimuli constantly.
It’s about observing the customers. For example, when I travel, I always take the public transports, go to the supermarket, and commit to spending an extensive amount of time talking with the locals.
Understanding people’s lives—what people are trying to do, what are the things they buy and use, and why these things—is a great source of inspiration.
And it’s about observing other businesses and new technologies. You also need to understand what are the resources you can leverage to create value for your customers.
For this, I chat with industry experts, listen to people who are advocates of specific products, and often try new products myself.
Resources shared in the interview
A value proposition is the foundation of any business model. And to get it right it means to have a business in the first place! That’s why I suggest you dive into The Value Mix as you’ll find many resources to build the foundation of your business!
Blogs to follow:
You can also follow Guerric, on his blog.
Resources from the blog:
- What Is a Business Model? 30 Successful Types of Business Models You Need to Know
- Business Strategy: Definition, Examples, And Case Studies
- What Is a Business Model Canvas? Business Model Canvas Explained
- Blitzscaling Business Model Innovation Canvas In A Nutshell
- What Is a Value Proposition? Value Proposition Canvas Explained
- What Is a Lean Startup Canvas? Lean Startup Canvas Explained
- What Is Market Segmentation? the Ultimate Guide to Market Segmentation
- Marketing Strategy: Definition, Types, And Examples