Value proposition is something that isn’t always easily understood, which can lead to misconceptions of a product or service’s position in the market. When you think about your value proposition, it’s important to define it in terms of WHAT IT DELIVERS TO THE USER AT A FUNDAMENTAL LEVEL and not confuse that with the method of delivery.
For example, if you’re building a streaming music service that is specialized in new music discovery, you might be conceiving of your value proposition as music playback and your competitors as other music streaming services. If that’s the case, you’re thinking too narrowly because, at a fundamental level, a music streaming service delivers entertainment and your competition is ANYTHING ELSE THAT DELIVERS ENTERTAINMENT.
That means that you are competing with video streaming services like Netflix or Youtube, social apps like TikTok or Instagram, your competition is books, movie theaters, video games, sports, even (for many people) news and political coverage. That is because if a person wants to be entertained and decides to watch TikTok videos or the Super Bowl, then they aren’t listening to your music streaming service. In this case, the music delivery is the method by which you are delivering that value and new music discovery is a competitive differentiator.
Luckily for you, entertainment is a fundamental need that every human being on the planet will seek out, so you are starting with a broad pool of users. But your goal should be to narrow it because you want to focus your design efforts and user acquisition on users who are likely to choose music over other forms of entertainment a decent amount of time. Once you are dialed in on who those users are, it’s important to understand them as deeply as possible. You want to know what other entertainment experiences they engage in and what other platforms and brands they use so that you can use that to your advantage (e.g., a cross-promotional effort, a plug-in, or a collaborative experience) or know when to get out of the way (e.g., not timing major releases to coincide with the latest Avengers movie or Call of Duty release).
If your value proposition is based on another fundamental need, such as getting meals to eat, managing your finances, or getting people or things transported from point A to point B, then you can use some version of this thinking to properly position yourself in the market. But it’s important to remember that it is all deeply rooted in a clear understanding of your value proposition.