8 years, 3 months ago

How To Understand The Difference Between Value-Proposition and a Product or Service

One of my startup heroes Steve Blank wrote in a blog post that

“value proposition is the fancy name for your product or service”

It is with some trepidation that I have to disagree with Steve here. He is a brilliant mind but I do not share the view that a value-proposition is the same as a product or service. They are closely related but discrete concepts.

Rather than attempting to match the intellect of Steve Blank (I could never hope to do so) I’ll leave it to a few of the World’s great minds to do my bidding.

First, Tom Graves’ recent blog “What is a value proposition?” uses his own Enterprise Canvas and Nigel Green and Carl Bate’s VPEC-T model to beautifully illustrate both the quality of the models themselves and to clearly distinguish value-proposition from products or services.

  • value-proposition guides and drives the why for the service’s activities

    value-creation presents the how and with-what of the service and its products, linked back to that why

    value-governance links and verifies the with-what, the how and the why, always striving to reduce the gap and tension between desired-ends and realised-ends

Second, Nick Malik’s in his post “The EA Metamodel behind the Business Model Generation” uses data modelling to show how value-proposition is a discrete concept from products or services.

Both are wonderful articles that helped me to really appreciate the meaning of ‘value-proposition’ and I commend them to you.

One thing I would like to add in closing is that although both articles provide evidence to suggest that Alex Osterwalder’s Business Model Canvas can be (d)evolved into a more granular form, and that more granular form may be more ‘fit-for-(some)-purpose(s)’. I still think the Business Model Canvas’ success is due to its simplicity and ease of explanation. So it is still a brilliant tool, especially early in each organisation’s journey. The Business Model Canvas, Tom’s Enterprise Canvas and The Lean Canvas are each ‘fit-for-(some)-purpose(s)’ and have a place in my enterprise architecture kitbag.


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