New-Technology Startups Seeking Pilot Customers: Crafting a Pair of Value Propositions

What is it about?

A corporation that employs an “outside-in” startup program needs to screen a large number of potential startups and assess each time: What is the value of the startup’s offering to our business, and what resources and support will the startup need so we can actually obtain its offering? However, many startups are not very good at communicating their customer value proposition in a way that helps the customer firm making such assessments. This article recommends that startups construct two sequential value propositions. The Innovative Offering Value Proposition communicates how the startup’s offering creates superior value for the customer. It answers the question: What is extraordinary about the startup’s offering that will enable the customer to solve a significant problem it has or achieve a top priority it has? The Leveraging Assistance Value Proposition conveys what the customer firm will get in return for providing support and resources to the startup. It answers the question: What will make it worthwhile from the customer’s perspective to support the startup to realize its innovative offering?

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Why is it important?

------------------------------------------------------- Contribution to Academic Scholarship ------------------------------------------------------- A corporation that employs an “outside-in” startup program needs to screen a large number of potential startups and assess each time: what is the value of the startup’s offering to our business, and what resources and support will the startup need so we can actually obtain its offering? However, many new-technology startups are not very good at communicating their customer value proposition in a way that helps the customer firm making such assessments and there is little research to guide startups. This article demonstrates how startups can tailor customer value propositions to large, established firms that have outside-in startup programs. ------------------------------------------------------- Contribution to Management Practice ------------------------------------------------------- Based on our research, we counsel technology startups to construct two sequential value propositions, which answer different questions from the customer’s point of view. The Innovative Offering Value Proposition communicates how the startup’s offering creates superior value for the customer. It answers the question: What is extraordinary about the startup’s offering that will enable the customer to solve a significant problem or achieve a top priority? The Leveraging Assistance Value Proposition conveys what the customer firm will get in return for providing support and resources to the startup. The Leveraging Assistance Value Proposit