This is a question that I am not sure I have a definite opinion on but I would love to hear yours. It was inspired by a NEF workshop that I attended last Friday.
At various points during the day and indeed during other NEF workshops, we discussed the importance of the value proposition and how fundamental it is to offer a product/service that is better than your competitors in at least one compelling way.
I am not arguing the importance of the value proposition as such. I completely agree that in order to provide an effective product or, as in my case, service, you need to know exactly what problem you are solving for your customers, how you are solving that problem and what this will mean for them. What I do question is how important it is to have a completely unique value proposition and aside from that, how possible this is to achieve in a world full of so many businesses!
The babysitting industry is already a pretty saturated market and I am under no illusion that it can only become more so. The barriers to entry are low and no one (me included..yet!) seems to have cracked the model in the same way that Airbnb have done for hospitality or Uber have for mini-cabs.
However, taking Airbnb as an example, there are now lots of competitor home share companies such as HouseTrip and HomeAway who are offering what seems to be an extremely similar, if not identical service. As a consumer, I certainly can’t see any tangible differences in the value proposition from Airbnb vs another business – Airbnb just happens to be the one I am most familiar with (and if I’m honest, am totally obsessed with) but is ‘better marketing’ really what makes them unique?
An even more crowded marketplace of late seems be on-demand home cleaning and laundry services. I have listed a few of each type below to illustrate:
Home cleaning services:
- Mopp (owned by Handy)
I’m sure all of these businesses will be able to tell you at least one thing that makes them stand out from the others. The problem is, I’m not convinced it will be that significant.
For example: Lavanda charges £12 for a washed and folded bag of laundry (but only up to 8kg) whereas ZipJet charges £12.50 (but seemingly no weight limit). Then Lavanda doesn’t require you to book a 30min long collection slot (they say they will be at your home in minutes) and yet ZipJet does. But both say they will get your laundry back to you within 24 hours and have excellent service experts on hand as well as very easy to use apps and excellent customer feedback. Is there anything to compel you one way or the other?
Furthermore, the more established businesses operating in a crowded market place (Facebook/Twitter, Airbnb/HomeAway, Uber/Hailo) are all still doing incredibly well, despite their similar offerings. In which case, does not being unique really matter and is there room for more than one? This is certainly something I feel is true with babysitting – since there are so many families with children, I don’t see the harm in being one of two or even five major babysitting services on offer. In some ways being ‘the one’ would make me more nervous as i’d wonder what everyone else was being put off by that I didn’t know about, a bit of healthy competition is a good thing!
If uniqueness isn’t the be all and end all, what is it that really makes a startup a success? Plenty of people have stage presence, an excellent singing voice and the ability to work 24/7 but only a lucky few (and certainly not just one judging by the 10 previous winners of the UK series and more than that in the international franchises) have the ‘X-Factor’.
Have I completely missed the point on this? or is the idea of the value proposition a useful tool to consider when forming your business and thinking about it academically but not so relevant in practice?
Answers on a postcard please! (or if you don’t use Touchnote to firstname.lastname@example.org)