Value Proposition Design: How to Create Products and Services Customers Want

by Alexander Osterwalder, Yves Pigneur, Patricia Papadakos

If you liked "Business Model Generation," you'll love "Value Proposition Design." The sequel builds on the same visual format and practical tools that made the first one so useful. It shows you how to use the Value Proposition Canvas, a practical business tool to design, test, create, and manage products and services customers want. It compliments and perfectly integrates with the Business Model Canvasfrom "Business Model Generation" so you can succeed with great value propositions embedded in scalable and profitable business models.

Practical exercises, process illustrations, and workshop suggestions help you immediately apply the tools in the book to your daily work. The book includes an online access to Strategyzer.com to complete and assess exercises interactively, learn from peers, and download pdfs, checklists, and more.

You'll love "Value Proposition Design" if you've been overwhelmed by the task of true customer value creation, frustrated by unproductive product meetings and misaligned teams, involved in bold shiny projects that blew up, or simply disappointed by the failure of a good idea."Value Proposition Design" will help you successfully understand the patterns of value creation, leverage the experience and skills of your team, avoid wasting time with ideas that won't work, and guide you through the design and test of products and services that customers want.

Genres: Business, Design, Entrepreneurship, Nonfiction, Buisness, Management, Leadership

290 pages

First published September 16, 2013

About the author

Dr. Alexander (Alex) Osterwalder is one of the world’s most influential strategy and innovation experts, a leading author, entrepreneur, and in-demand speaker whose work has changed the way established companies do business and how new ventures get started.

Ranked No. 4 of the top 50 management thinkers worldwide, Osterwalder is known for simplifying the strategy development process and turning complex concepts into digestible visual models. Together with Yves Pigneur, he invented the Business Model Canvas, Value Proposition Canvas, and Business Portfolio Map – practical tools that are trusted by millions of business practitioners from leading global companies including Microsoft, Coca-Cola, Nestlé, MasterCard, Sony, Fujitsu, 3M, Intel, Roche, Colgate-Palmolive, and many more.

Strategyzer, the company Osterwalder co-founded in 2010, is an innovation powerhouse, providing online courses, applications, and technology-enabled services to help organizations effectively and systematically manage strategy, growth, and transformation.

Osterwalder’s books include the international bestseller Business Model Generation, Value Proposition Design: How to Create Products and Services Customers Want and Testing Business Ideas, and his forthcoming book for senior leaders, The Invincible Company, to publish in spring 2020.

He holds the Strategy Award from Thinkers50 and the European Union’s inaugural Innovation Luminary Award. In 2019, Osterwalder chaired the prestigious Drucker Forum, the premier annual business management conference. A frequent and popular keynote speaker, Osterwalder travels the world discussing his ideas and strategies at Fortune 500 companies, premiere innovation conferences, and leading universities.

He holds a doctorate from HEC Lausanne, Switzerland, and is a founding member of The Constellation, a global not-for-profit organization connecting local responses to global issues around the world.

Reviews

[د.أمجد الجنباز · Rating 3 out of 5]

يتحدث الكتاب عن كيفية دراسة منتجك وتعديله بحيث تقدم أفضل قيمة للعملاء
وذلك باستخدام نموذج تصميم القيمة المقدمة
هذا النموذج يدرس بشكل مفصل العملاء الذين تود خدمتهم من حيث معرفة الآلام التي يعانون منها
والمنافع التي يبحثون عنها
والوظائف التي يمارسونها بشكل دوري

ثم البحث عن منتج أو خدمة تخفف من آلامهم وتزيد من منافعهم

وهو مناسب جدا خاصة لمن لديه فكرة مشروع جديدة ويريد تطبيقها، وذلك بعد استخدامه لنموذج العمل.

والكتاب يحوي طرقا سهلة لاختبار الفكرة للتعديل عليها

[Jose Papo · Rating 5 out of 5]

This book is a must read companion to "Business Model Generation" by Osterwalder. You REALLY need to read this book, because it goes deeper on the most important part of your solution: the Value Proposition. Value Proposition is a combination of customer segments and the value you provide to them. It's the way you provide value to the customer and the business model is how you generate value for your company.

What I liked most is that Osterwalder not only used the important aspects of jobs to be done, pains and gains from Disruptive Innovation literature but integrated it with experiments and Lean Startup in a very simple and clear way.

So do yourself a favour and buy this book if you create or improve products and/or services at your job or as an entrepreneur.

[Ahmad hosseini · Rating 4 out of 5]

The value is what customers are looking for and ready to pay money for it. So designing a right value for right customers is very important for any business. This book helps you:
• Understand the patterns and value creation
• Leverage the experience and skills of your team
• Avoid wasting time with ideas won’t work.
The tools presented in this book can be applied to both startups and established organizations. Value Proposition Canvas is one of this tools that can be used to design and test a value.
Format of book is practical, visual, and enjoyable!

[Люда Дмитрук · Rating 5 out of 5]

Якщо б ви могли прочитати лише дві бізнес-книги, то нехай ними стали б "Розробляємо ціннісні пропозиції" та її попередниця "Створюємо бізнес-модель". Для молодих стартапів, великих компаній чи неприбуткових організацій - ця книга настільки проста, універсальна й концентрована, що стане корисною абсолютно для всіх!

[Semi-Academic Eric · Rating 3 out of 5]

Something seems to be missing from this book that Business Model Generation had. I can't quite put my finger on it yet. Is it that the graphics are more flat and seemingly artificial? Yet, now they are in color.

Has this process gotten overly simplified and systematized? Does it leave as much room for creativity and experiential insight?

I think I need to read more to answer these questions. However, my initial feeling is that I am not sure that I want to... Aren't there other resources that already deal with value proposition design very well?

Please let me know if you think I'm mistaken at this, but it seems like a lot of extra fluff has been added in to make this into a book.

[Amir Rafiey · Rating 5 out of 5]

اول این که کتاب رو اگر دارید به کسی قرض ندید چون یه جور کتاب مرجع هست که باید بهش مراجعه کنید
دوم این که خیلی از کتاب خوشم اومد
به نظرم اگر کسب و کار خاصی دارید حتما و حتما این کتاب رو بخونید و از ابزارهاش برای کارتون استفاده کنید
ابزارهایی که معرفی میکنه مزیتی که دارند این که سرعت بالایی دارند برای استفاده
به طور کلی از ابزارهاش میشه برای جهت دادن سریع به کسب و کارتون استفاده کنید

[Adam Zabell · Rating 4 out of 5]

tl;dr - infographic-like reference to get you from idea to profit

Once you buy into the idea of a Customer Profile instead of the psychodemographic profile, everything else falls into place. I've never been a fan of 'The Demographic of Our Best Customer' so this works for me. Kudos for referencing and borrowing the keywords of other authors; reinventing the wheel helps nobody.

And while I was impressed with how they used the publication of the book itself as a case study for how to use the book, the real magic comes from the fact they have reinvented the "business help book" so that you *have* to buy the paper copy (with their offer to upsell you some online material). Graphic and tactile functionality are integral to the book, something no kindle or eReader can match. THAT is solid sales, marketing, and consumer understanding.

[Ahmad Badghaish · Rating 4 out of 5]

Great book. I thing the authors haven’t explained the concept of the Value Proposition within Generating Business Model, so they came back with another book. The books has explained the previously mentioned concept very well.

[Mehis · Rating 5 out of 5]

Great handbook and addition to Business Model generation. Together two most influential business books of the decade (or even two). Must read for all designers and business builders. Strongly recommended to everyone else who are interested in professional development.

[Magno de Santana · Rating 5 out of 5]

Livro extremamente recomendado. Conteúdo excelente e ainda tem uma parte online para exercitar o que é ensinado no livro. Saia do prédio e valide suas hipóteses...:)

[Ebony · Rating 3 out of 5]

There are gems in Value Proposition Design. The principles of canvas, design, test, and evolve are clear. There are step by step instructions for completing the canvas, collecting customer insights, testing, and launching. Buy it to keep as a reference book for iterating within a current business and creating new ones. Sign up for the Strategyzer account for the free downloads. To be a workbook style text, I did find it wordier on the sentence level than I would have anticipated, but nonetheless, it’s a well-designed the lean start up segment on how to design a business with customers at the core.

[Andriana Novosad · Rating 5 out of 5]

Дуже прикладна і чітка інформація, легко сприймати, ідеально для людей-візуалів. Перший раз читала для загального розвитку - круто, другий раз шукала відповіді на питання щодо реалізації конкретної ідеї - зайшла ще крутіше.

[Olha Prots · Rating 5 out of 5]

Як і "Створюємо бізнес-модель, це надзвичайно цінна книжка, особливо для тих, у кого на думці є створити щось своє, або ж дотичних до менеджменту чи консалтингу.
По-перше, вона цікава, кольорова, інформація подана візуально.
По-друге, це практичний посібник. В якому присутні хороші приклади та завдання, що допомагають краще зрозуміти певні техніки.
По-третє, без водички, все коротко, наголос на основному, вдалі приклади і доречна нова інформація на кожній сторінці.
З нетерпінням чекаю на інші книги серії

[Petar Ivanov · Rating 4 out of 5]

A great read focused on the Value Proposition Design which is embraced in the early days of the business creation. I liked the framework and the materials provided in the book. It helps you answer the biggest question of business - What value will you bring to your customers?

[Ivan Atanasov · Rating 5 out of 5]

Must read for anyone that is trying to create a new product or service. It is very useful for new ventures and also for new division in existing company.

[Tibor Konig · Rating 5 out of 5]

Az új generációs (= tartalomszervezési és információ-megjelenítési szempontból a hagyományos kiadványokat meghaladó) üzleti könyvek egyik legjobb példája. Eddig inkább kézikönyvként használtam, most vettem a fáradságot, és elejétől végéig elolvastam. Kötelező!

[Kunal · Rating 3 out of 5]

Decent Read. Graphics are engaging.

[Raafat · Rating 4 out of 5]

يا ريت يتدرّس هالكتاب قبل ما نعلم الناس كيف يبدؤوا مشروعون الشخصي لأنو حتى اليوم عم نشوف ألف حدا عم يعمل دورة تأسيس مشاريع صغيرة وهالمشاريع الصغيرة للأسف عم تتأسس وتنهار ��أنو مالا أي فائدة غير انو صحابا شايفينا مفيدة.
منشوف كتير مشاريع برّاقة بلشت وجابت صدى وبعد فترة سنة سنتين ماتت, طيب ليش ؟ الكتاب بيعلّم انه غلط الواحد يوقع بغرام فكرته الأولى, لازم يشوف العالم عنج�� شو محتاجة وشو يقدملها مو بس خطر ببالو الواحد فكرة يلا تعا نعمل مشروع ونخطط, الموضوع علم قائم بحد ذاته وبده دراسة كبيرة لحتى الواحد يدرس فائدة الشي يلي رح يقدمه قبل ما يفكر أصلاً بباقي تفاصيل المشروع. نقطة تانية مهمة بالكتاب يلي هية أد ما كانت الفكرة رائعة والشغل ممتاز والناس حابة فكرتك بس إذا المشروع ما بيجيب عائد مادي فما رح يستمر حتى لو كان مشروع خيري أو تطوعي أو توعوي.
كتاب مميز ورائع, وعن نفسي اكتشفت كتير أخطاء كنت واقع فيها وإن شاء الله صار وقت نصلّح ونتلافى

[Fred Rose · Rating 5 out of 5]

This book will become more of a classic than Business Model Generation. Summarizes all the key points from lean startup, design thinking and many other topics. Excellent, use it in my classes and work.

[Anas Faris · Rating 5 out of 5]

A very clear and applicable theory not only for business, but for organizations and events as well.
A sort of interactive book, with online companion tools.
A great lesson on how to test your hypothesis on the value proposition.

[Mario Lucero · Rating 5 out of 5]

I strongly recommend to read Business Model Generation before buying this book to have an idea of the Business Model Canvas.

This book is very practical because of that you should enjoy reading this book.

[Johan Oskarsson · Rating 5 out of 5]

Just awesome

[Mohammed EL ASSAL · Rating 4 out of 5]

A deep dive of the business model canva design.
On theory, the framework is the way to go for business excellence.
this is a reference book not a one time read it.

[Kenny Lam · Rating 5 out of 5]

Easy to read. Uses less jargon and is easy to understand.

This book will help you to create a product to customers want and love.

[Alex ♈ · Rating 3 out of 5]

Die schrecklichsten Illustrationen ich habe je gesehen habe...

[InvestingByTheBooks.com · Rating 4 out of 5]

This is a follow-up to the best selling Business Model Generation from 2010 and the sequel drills deeper into two out of the nine parts that made up the Business Model Canvas previously presented. Value Proposition Design aims to help the reader find a good fit between the value proposition offered to customers and the needs of the target customers. Alex Osterwalder is a Swiss business strategist, entrepreneur and author that have had great success by making his messages as simple and practically applicable as possible. The book seeks to help companies to take steps that will make them deliver what customers want to buy.

The core of what the authors name the Value Proposition Canvas is a three-step process. First, examine and list what customers in a segment do, what outcomes they wish for and which fears they have. Prioritize the above from the most important to the least in order to understand what matters for customers. Second, list products offered, outline which products help customers to achieve what they wish for and which help them avoid what they fear. Prioritize with regards to how important the products are for customers. Lastly, decide on a value proposition with a good fit with what customers want.

As defined by the book great value propositions have great business models with either high potential volumes or good pricing power. They focus on what matters most to customers, focus on unsatisfied customer needs, differentiate from competition and substantially outperform competition in at least one dimension, target a few things extremely well, align with how customer measure success and are difficult to copy.

So, in essence: understand what your customers want, offer them something of what they want most that they also are ready to pay for and that differs from what the competition is offering. It sounds like a fairly obvious strategic exercise for companies to perform now and then. This doesn’t mean that all or even most companies do, as they are trapped in old structures and hierarches.

Value Proposition Design should, to deliver its full value, be read in conjunction with the previous Business Model Generation and it shows a lot of similarities with the predecessor. It presents a basic model that is simple and almost obvious when you have seen it but still have great value as prior to seeing it your thoughts aren’t sufficiently organized. At least for me it started a process where I jotted down plenty of scribbles on issues regarding my own work. It is also a beautiful book in a designer type of way but at times it crosses the line and looks more like a children’s book. Being pedagogical isn’t always the same as drawing plenty of colorful stick figures.

Just as in the previous book my opinion is that the authors add too much adjacent material to the first important model. The Value Proposition Canvas is presented in the first 60 or so pages and the rest 200+ pages are basically about implementation issues. All these supplementary models from this or that cool art director, savvy venture capital investor etc. distract and diminish its practical value more then anything else. Implementation is important but the balance becomes too skewed in my opinion. I also got a bit disappointed as the authors start out with pointing to the fact that value proposition innovation occurs both in new ventures and through reinvention of existing businesses but then hardly touches on the later.

The target audience for the book is hardly the executive management of a crude oil refinery, a petrochemical plant or a mining corporation. It is rather the forerunners of the digital economy that benefit the most from the text. If you are setting up a new software company this is a book for you.
Value Proposition Design presents an illustrative and important base model that I will continue to use for a long time and many companies would benefit greatly from doing the same.

[Lloyd Downey · Rating 4 out of 5]

My daughter gave this to me as a Birthday present (one of the books I'd suggested to her as possible presents). She has a background as a McKinsey consultant and I detected a note of reticence with the gift-giving. I suspect that she thought it lacked something. Now that I've read it I can kind-of see what she might have been thinking. This is a modestly large book devoted to a particular methodology that the authors have developed (or adopted parts of it from other work). The methodology is really about bringing some new product of procedure into a business in such a way that it is liable to be successful.....that is, provide value for the customer and create value for your business. Really, there are many similar models in circulation; there is not just ONE way of doing this but this methodology looks reasonable to me and can be applied fairly consistently across an organisation and with different products and services. So it's flexible. Basically, they have two elements that are re-used throughout: One the one side is the customer template with; pain relievers; gain creators and the product or service (value proposition). And on the other side is the Customer profile with: the jobs the customers are trying to get done; the pains or bad outcomes the customer currently has; and the gains that customers want to achieve. So you are trying to deliver an appropriate pain reliever to reduce the customer's pains, for example.
Pretty simple but they manage to apply this template over and over again....to different segments of customers, to use it as a refining tool when something doesn't work, etc., etc. I remain mildly impressed. But I was impressed with the design and artwork and presentation of the book. They have done it well. The layout is simple, easy to read and very logical in the way it flows. (Maybe a bit longer than it needs to be....maybe a bit repetitive). And I found myself wondering; "who, in a fast moving business world, is actually going to methodically carry out all these steps?" Probably nobody....it's just too long and too convoluted. But the principles are all there and some of the steps could be taken very rapidly. In fact, the authors are at pains to point out that one should do a lot of cheap, rapid, testing before committing to anything that is going to use a lot of resources and prove costly if it fails. So full marks for that.
I'm happy to recommend it as a useful methodology that could readily be adopted by a wide range of organisations...not just those seeking to make a profit. Four Stars from me.

[Adam McNamara · Rating 4 out of 5]

Value Proposition Design is about...how to design value propositions...

A value prop defines the benefits a customer can expect from your product. It’s one part of a business’ model, although arguably the most important. A value prop has two parts. The first is a customer profile - who you’re solving a problem for, what problems they want solved, the pains of not having the problem solved today, and what benefits solving the problem would lead to. The second part is the value map - the products and services you offer, how they alleviate the customer pains, and how they deliver benefits.

The book is good. It explains, step-by-step, how to design and test value props to increase your chances of business success. The process is solid, the steps are fairly clear, and the tests are effective.

That said, I’d suggest three major changes to this book.

In the last chapter, the authors show a small diagram called “Progress Indicators.” It visually summarizes the entire value prop design process - the activities and milestones, as a flow chart. This visual representation is the trunk of the tree of knowledge. All of the material in the book are simply branches and leaves on this tree. This diagram should be presented in the first chapter to then attach all of the supporting information.

The first step in the process is “Value Proposition Prototyping.” After, startups are then encouraged to interview or observe customers to understand and rank problems, pains, and gains. This is backwards. Problems should be observed first, and hypotheses developed and confirmed later. Prototyping first is simply hand waving and a waste of time. As the authors say later, evidence trumps opinion. This is a rare case of not practicing what they preach.

Finally, talking to customers... Talking to customers is THE fundamental skill in this book. It comes up again and again. And yet, it’s sadly underserved by the material. The book provides tips for interviewing customers. Instead, it should provide sample scripts for Problem Discovery, Problem Validation, and Value Prop Validation. Best practices should be discussed using real narrative examples. Not including these creates a huge opportunity for the good advice in this book to fail.

That said, this is a great book discussing the hardest part of designing products. But be aware you’ll have to read additional books to be effective.

[Fred Cheyunski · Rating 4 out of 5]

Clarifying Value Propositions for Both Profit and Non-profit Organizations - Many have written about the benefits of this book for for-profit companies, but it is also useful for non-profits as well.

There are aspects that are helpful in each of the four main sections of the book. Since I have worked with the former and now am getting back to working with the latter, I have applied the concepts first-hand on a recent project. Particular aspects in the sections that seemed most valuable were as follows:

1. Canvas - mention of an Environment Map, description of basic ideas and tools related to using the Business Model Canvas and Value Proposition Canvas to outline the major aspects of the offering(s) and supporting organization (60+ pages in the section)

2. Design - explanation of many protocols and aids for developing/revising Value Propositions via ad lib statements, using the canvas for modeling, push and pull approaches as well as "zoom-out and zoom-in" views from context to what the customer is trying to do (100+ pages in the section)

3. Test - the testing process and methods such as extracting hypotheses and applying build, measure, and learn steps to confirm and devise products and/or services (80+ pages in the section)

4. Evolve - allusion to monitoring, measuring and improving to set-up means for continuing to better offerings and organization (15+ pages in the section).

The examples such as those related to the book itself and Strategyzer were also helpful. But what proved most instructive involved customizing the canvases and items mentioned above as they pertain to a non-profit social service organization. This kind of focus is helpful in sorting through and making the myriad of graphics and visual tools most meaningful (e.g. see my review of `Visual Leaders" as well).

If involvement in such activities appeal or are important to you, consult this book for guidance along the way.

[Iryna Paprotska · Rating 4 out of 5]

Розробляємо ціннісні пропозиції - це книжка про business canvas. Іншими словами, описує інструменти за допомогою яких можна краще зрозуміти бізнес-модель замовника, або побудувати свою, краще зрозуміти середовище і контекст у якому потрібно працювати і сфокусуватись на замовникові.

Коли читати: коли є необхідність або бажання зрозуміти як працює юізнес або побудувати свою бізнес мдель, а розуміння того, як це робити - немає. Насправді також раджу не читати і не купувати цю книжку без чітко поставленої мети, тому що без практики вона безцільна. У мене ці дві книжки (разом з Створюємо бізнес-модель) на столі вже пів року і час від часу туди доводиться дивитись по роботі. Інакше - не було б змісту з ними працювати.

Що подобається:
- викладено просто і зрозуміло
- підкреслена необіхність працювати з запитом клієнта
- пояснено, що не завжди треба починати з дослідженя, проте забувати про клієнта і не півотувати не можна

Що не подобається:
- по відчуттях книжку побудовано так, ніби команда завжди в одній кімнаті.. в реаліях сучасного дистрибютного світу, це малоймовірно
- інструменти подано без прикладів, що може бути не так добре