Laying the Foundation for a Thriving Startup: The Importance of Value-Driven Development of Products and Services

Table of Content:

Introduction

Finding the right value to provide

Making an efficient delivery process

Examples

Conclusion

Introduction

Why creating a strong foundation for your start-up or early-stage SME is important? Focusing on value-driven product and service development, establishing processes focusing on value creation and creating a continuous improvement (Kaizen) culture can make all the difference in building a successful business that stands the test of time.

How to stay focused on the right customer value

To achieve this, ask yourself and your team a few essential questions:

1. What problem are we trying to solve, and who are we solving it for?

2. How many people face this problem, and how many are actively seeking a solution?

3. Are our customers emotionally invested in solving this problem, and does our product or service address their emotions?

4. Is there value in this for our company, and what are we hoping to gain? (it is not shameful to ask, you are building a company after all, you need to get something in return)

By answering these questions early on, you'll gain a deeper understanding of your target audience and create offerings that genuinely resonate with them.

How to focus on efficient product and services delivery

Once you've understood your customer's needs, it's time to focus on delivering your product or service in the most efficient way possible. You can use tools like Value Stream Mapping (VSM), which is a visual way to map out every action required to produce your product, from raw materials to the final product reaching the customer. By seeing the entire process, you can identify steps that may be unnecessary, time-consuming, or costly, and then make improvements to streamline your operations.

Another helpful tool is Kaizen, a Japanese term that means "continuous improvement." In simple terms, Kaizen is about consistently seeking ways to make things better, involving everyone in your team to find and eliminate waste or inefficiencies in your business processes. By fostering a Kaizen mindset, you encourage your team to share ideas and solve problems together, creating a culture that values innovation and growth.

Keep in mind that your ultimate goal is to build a business that solves real-world problems and delivers value to your customers. By optimising your processes with tools like VSM and Kaizen, you'll not only create better products or services, but also establish a strong foundation for future growth, with an innovative culture that continuously strives for improvement.

Scenario 1: Imagine you're developing a new mobile app for managing personal finances. Your target audience consists of young professionals who want help managing their budgets. By asking the key questions mentioned above, you discover that most customers are reluctant to connect their bank accounts directly to your app due to concerns about personal financial data safety. Although you offer end-to-end encryption, it seems this isn't enough.

At this point, rather then writing code for features nobody wants, you conduct more surveys, and you find that users would be happy with a simple feature that allows them to take a photo of their receipts, and have the app read the values from the image to create a spending list and adjust their budget balance with possibility of visual representation of their spending habits rather than just looking at numbers in a column.

Using the lean product development approach, you can create a tailored solution that addresses your customers' concerns and solves a problem for them. A problem that is emotional for them therefore, they are likely to react when there is a solution to it. In this case, you prioritise implementing the photo-based budget tracking feature, which enables users to snap a photo of their receipts, and the app automatically extracts the relevant information, updates their budget, and provides a comprehensive, visual overview of their spending. Plus this gives you the idea to name your product: "SnaFi" :)

Establishing these product development methods early in your start-up allows you to build a customer-focused culture and continuously improve your product development process with your production and people. This approach reduces waste, ensures alignment with customer needs, and fosters innovation. In contrast, transforming your business later may lead to more significant challenges, as you might need to change existing processes, cultures, and systems, which can be costly and time-consuming.

After launching "SnaFi", you can continue using these principles to gather customer feedback and identify areas for improvement, ensuring that "SnaFi" remains a valuable and reliable tool for users while maintaining a competitive edge in the market.

Scenario 2: Let's say you've just launched a friendly, neighbourhood cleaning company called "ForeverClean". Your team takes care of residential and commercial properties' indoor cleaning needs. Embracing the principles of lean product development, you focus on value-driven service development and fostering a culture of continuous improvement.

You constantly asking those questions mentioned above. One day, as you chat with a client of yours, you discover a problem that really bothers them: cleaning windows, especially on 3-4 storey buildings without balconies. It's a real headache for them and every year they are risking their lives trying to clean it! They mention, that there is nobody they could find to clean it for them. This emotional pain point becomes the center of your development efforts, as the lean production development encourages you to address customer needs first and foremost.

During your next team meeting, you bring up the window cleaning challenge your customers are facing in multi-storey apartment buildings. You ask your team if they've encountered similar issues elsewhere, and they excitedly agree, sharing stories of clients who struggle with this problem.

With the team's confirmation, you decide it's time to tackle this challenge head-on. Inspired by the value-driven approach of lean production and process development, you prioritise investing in specialised equipment and training to help your team conquer those hard-to-reach windows and shades. Your team embraces the spirit of continuous improvement and addressing the root cause of the problem, a key aspect of problem solving, your experienced team members develop a game-changing method using water-fed systems that transforms window cleaning into a breeze, leaving your customers delighted and your team feeling accomplished. Your customers are very pleased with your solution and service. As a result, you're attracting new clients who were struggling with the same issue. These clients love your window cleaning service so much that they ask you to handle all their cleaning needs, both inside and outside their properties. ForeverClean becomes the go-to cleaning company in your community.

Let's consider two examples to illustrate the impact of focusing on value-driven product and service development

This was possible because you understood the early adoption of lean product and process development. Focusing on creating early on a strong, customer-centric company culture that fosters growth and continuous improvement – key ingredients for long-term success!

Simply by embracing value-driven product and service development, your start-up or SME can optimise operations, deliver value to customers, and maintain a competitive edge in your industry. Continuously ask the right questions, stay dedicated to understanding customer needs, and foster a culture of collaboration, innovation, and improvement. Apply a culture that reflects back on good and not so successful projects or development efforts. These reflections give you and your team a unique opportunity to learn what went well and what could have been done differently. Remember, everything that could have been better is an opportunity to grow. Embrace it and learn from it rather then punishing people for it.

In conclusion, establishing a strong foundation for your start-up or early-stage SME requires focusing on value-driven offerings and continuous improvement. Prioritize customer needs, optimize processes, and embrace the mindset of growth to create a thriving business that stands out from the competition and positively impacts the lives of your customers.

Conclusion

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