As was simulated, the value proposition includes all the features of your product but also the pains and gains you're solving for the customer segment and that's where the market goes.

Another common paid activity is advertising. What kind of advertising?

So let's dive down a level deeper and first focus on what's the jobs needed to be done.

The value proposition says, Hey, it's not about your ideal product, it's about solving a problem or a need for a customer.

You cater an event where the cost to you was 200

There are some other things to consider in customer segments besides jobs to be done and pain and gain, and that is who's the customer?

This is essentially the flip version of the gains.

the hospital got a call from a guest at the scarlet red motel, checking to see if the pregnant woman was doing okay.

Another key component of understanding customers is understanding customer gains, which is a fancy way for saying what are the benefits that customers expect, or desires, so besides the jobs they want to get done what do they want to gain by using your product or service?

Is there any way that our product or service could actually solve anything in the top 5?

They took a communications device and made it a status symbol, and they transitioned from a product that solved a problem, integrated web browser, e mail, and phone into something that people now every year obsolete their own products by wanting to get the next one because it's now a need rather than a product.

Now let's see what they did in step 2.

Ah... finally a solution But wait... what was the question?

Something is up in Pakistan.

And our product fits right here and here's why, etc.

And in fact once they had their technical insight they started to talk to customers about pains and gains.

One of the interesting things is that entrepreneurs come back and say,

And in doing that, you're going to test your understanding of the problem, test your understanding of the solution, and when you do that it's going to prove that it solves the core problem of the customers.

Let's go to month two

Another great example is Fidelity.

Why do you want to think about keeping customers is that customers are a lot more expensive to acquire over here than they are to keep.

He was right. we have to fix real problem.

Much like ranking ranking pain, I want you to think about ranking gains.

Here's your client list.

They didn't just say 'I will be more responsible' They said

And in value proposition, the goal of this is to find out that minimum viable product.

Finding these other things really wouldn't have helped us solve the problem.

By now, you're intimately familiar with the business model canvass.

But for you to be a successful company and actually thinking about how much you could spend on them over here, you need to understand can I get them to spend more and more over time and how to keep them

It's 0 otherwise.

Let me say it again, waterfall development assumes you understand the customer problem and need on day one.

In customer relationships all the get keep grow metrics, some of which we talked about, some of which you'll discover, what were the customer acquistion costs?

And then you're going to do customer validation and actually see if your proposed solution actually matches what you think the customer problem was.

What's the value? What is it when they look at my company and my products?

And the fourth phase in customer discovery is you verify your pivot.

Okay, your problem is solved.

This is what I called the you should be so lucky to have this problem part of the funnel, and that's how you grow the customers you have.

So, if we take a look at the Jersey² team was worrying about, it's what most start ups worry about on day 1, is does my value prop match my customer segment, and do I have product market fit?

What am I going to look at?

The customer's complaint was about a sensitive issue.

So archetypes really helped us understand our customers, they value prop, the revenue and some of our pricing tactics.

Now, what s interesting is if you remember value proposition describes not only the features but also the pains and gains that they see, that they ve actually craved for the customer and that the goal is to figure out what the MVP is.

(Music) (Audience claps along) (Cheering) (Audience claps along) (Music)

One of the things that's hard for founders to realize is there's actually a customer at the other end and so while you're thinking this is the greatest thing since sliced bread the whole idea about customer development is to get you out of the building and tell me whose need or problem you're solving.

And while it might be, quote, a beta product, we never use that word.