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

by Alexander Osterwalder, Yves Pigneur, Gregory Bernarda

The authors of the international bestseller Business Model Generation explain how to create value propositions customers can’t resist

Value Proposition Design helps you tackle a core challenge of every business — creating compelling products and services customers want to buy. This practical book, paired with its online companion, will teach you the processes and tools you need to succeed.

Using the same stunning visual format as the authors’ global bestseller, Business Model Generation, this sequel explains how to use the “Value Proposition Canvas” a practical tool to design, test, create, and manage products and services customers actually want.

Value Proposition Design is for anyone who has been frustrated by business meetings based on endless conversations, hunches and intuitions, expensive new product launches that blew up, or simply disappointed by the failure of a good idea. The book will help you understand the patterns of great value propositions, get closer to customers, and avoid wasting time with ideas that won’t work. You’ll learn the simple but comprehensive process of designing and testing value propositions, taking the guesswork out of creating products and services that perfectly match customers’ needs and desires.

Practical exercises, illustrations and tools help you immediately improve your product, service, or new business idea. In addition the book gives you exclusive access to an online companion on Strategyzer.com. You will be able to complete interactive exercises, assess your work, learn from peers, and download pdfs, checklists, and more.

Value Proposition Design complements and perfectly integrates with the ”Business Model Canvas” from Business Model Generation, a tool embraced by startups and large corporations such as MasterCard, 3M, Coca Cola, GE, Fujitsu, LEGO, Colgate-Palmolive, and many more.

Value Proposition Design gives you a proven methodology for success, with value propositions that sell, embedded in profitable business models.

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

320 pages, Kindle Edition

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

[Gabriel Rondelli · Rating 3 out of 5]

The book follows the trend of business consultants that thrive on making risk seem irrelevant.
By following the Jobs-to-be-done approach, pains and gains you can shape the business model canvas from the customer's perspective, without taking a full classical "needs" approach.
Why the 3* then?

Well, for one, this book is clearly targeted at organisations, I mean the big ones. Alex sells high, he doesn't really care about some of the little folks that are just starting their own business, although to be fair, the book does have quite a few valuable pointers for entrepreneurs as well.

Second, the book is not linear, you have to go through it in order to understand the process, so you'll likely jump from stage to stage, trying to piece things together by following the recommendations.
Flow is what is lacking, structure-wise it's ok, although sometimes structure seems to lose to bloated graphics. As a reader, and mostly 'the how-to create products' reader, I'm mostly interested on the 'how-to', less than the graphics.

Third, just by following the prescriptions in the book, defining multiple jtbd, pains and gains for multiple contexts, with different solutions that will ultimately lead to different business models, it will take a lot of time. So this is to be done in the ideation phase, before settling on an implementation, but although it has a part of rapid prototyping, if you don't have users at hand or user-data from where to gather insights, this part is not "rapid" at all.

Overall, I recommend the book for a good system to follow when defining your persona and business models, it has good advice and a framework to follow, but don't follow the book by the letter if you want to go fast and find things along the way.
Also, not a book to be read from cover to cover, but something to come back to from time to time, for guidance and reflection.

[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.

[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.

[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...:)

[Miroslav Pavelek · Rating 5 out of 5]

Value proposition Design is about two simple<\i> diagrams - what the customers needs, what are his needs and pains and how the business is solving it.
While it sounds easy, there more than 200 beautifully designed pages how to fill it and test it.

[maarten mellegers · Rating 1 out of 5]

Soort college over hoe om te gaan met data en een nieuw product.
Hoe betrek je nieuwe mensen?
Waar let je op.
Ik vond het nogal vervelend lezen.
Het was een soort stripboek een uitgeschreven powerpoint.
Ook stond op de achterkant een omgekeerde titel met bad proposition.
Ik had er meer van verwacht.
Dus ik heb het meer doorgebladerd dan gelezen.
Zojuist weer ingeleverd bij de OBA.
Het werd aangeraden door een cursus die ik gevolgd heb maar ik weet niet maar waarom

[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.

[Camilo Manriquez · Rating 5 out of 5]

La obra "Diseñando la Propuesta de Valor" es el complemento necesario del libro "Generación de Modelos de Negocio", ambos de Alexander Osterwalder. Enseña a crear valor para tu negocio en base a lo que los clientes esperan de tu empresa. Crear alineación, medir, controlar, mejorar y reinventarse son los elementos claves del texto. Entretenido y dinámico de principio a fin. 100% recomendable.

[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 لأنو 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 عنجد 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.