Alexander Osterwalder has mapped six patterns of value creation, and he chose The Innovation Show to share them first. The co-founder of Strategyzer, best known for the Business Model Canvas, calls the new tool the Value Stack. It helps a team name the value its offer creates and then rank which benefit matters most to the customer before testing it.
Alex returns a week after his three-part series on The Invincible Company. This time he brings slides so fresh, in Aidan’s words, they are hot off the digital press.
From books to playbooks
Strategyzer has stopped writing books. Alex admits the books are dense, and readers kept asking for something closer to a practical field guide. So the team now builds playbooks around outcomes.
One outcome comes up constantly. Teams want a clear articulation of their value proposition. The Value Proposition Canvas is more than ten years old, and The Invincible Company gave readers a library of business model patterns. Alex wanted the same library for value propositions. He doubted it was even feasible. Then he decided it was time.
The six patterns of value creation
1. Ease boosters
The trigger question asks what you could make radically simpler or faster for customers. Nintendo launched the Wii as an inferior console and aimed it at casual gamers who found controllers baffling and games too hard. Motion control removed the learning curve and opened a market no console maker had served. Alex names Apple as a second, more familiar case.
2. Access boosters
Here you take a valuable asset that was scarce and put it within reach of far more people. Cars were handcrafted luxuries, built a little like carriages. Henry Ford cut the price of the Model T until his own factory workers could buy one. Alex calls this flavour the price buster, and every pattern has several flavours like it.
3. Confidence builders
How could you help customers feel safe or reassured when they adopt your offer? Airbnb had to persuade guests to stay in a stranger’s home, so trust became a supporting feature. FedEx went further. When it launched overnight delivery, the certainty that your package would arrive tomorrow was the whole proposition.
4. Value catalysts
Value catalysts outperform anything that came before on at least one dimension, almost creating a new market. Advertisers once suspected they wasted half their budget on people who never clicked, with no way of telling which half. Google Ads charged only for performance, so you paid for what worked.
5. Identity builders
These speak to self and belonging. Harley-Davidson is the obvious consumer case. Alex argues business-to-business works the same way and points to Salesforce Trailblazers, the community where developers came to treat the platform as part of who they are.
6. Market shapers
Market shapers change the rules of an industry through the value proposition itself. Diners Club created the credit card proposition, letting diners pay in a restaurant with plastic. It then had to build the business model behind it and persuade restaurants to accept the card. In business-to-business, Amazon Web Services made world-class infrastructure available to anyone, which also makes it an access booster. Strong offers often score on several patterns at once.
Putting patterns of value creation to work
Alex frames the patterns as a library for inspiration. Some may sound like common sense, yet common sense is rarely common practice, and naming the pattern makes the choice explicit. Identify the patterns your offer already uses. Next, use the Value Stack to decide which benefit the customer values most. Testing follows.
20% off Strategyzer playbooks
Alex has given listeners a discount on the new playbooks, which include the full patterns of value creation library and exercises to apply each one. Go to strategyzer.com and enter INNOVATIONSHOW20 at checkout for 20% off.
Win a copy of The Invincible Company
One of Alex’s slides shows a gentleman standing beside him, a co-author of one of Alex’s first books. Name him in the YouTube comments or reply to the Thursday Thought to win a digital copy of The Invincible Company, with thanks to Kyndryl.
Meet Alex Osterwalder in Dublin
Alex joins Aidan McCullen in Dublin on 1 and 2 December for two days with Enterprise Ireland clients and their client companies. If your organisation needs a keynote speaker on innovation, change or value propositions in Ireland that week, contact Aidan through theinnovationshow.io or reach Strategyzer directly.
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