So in the last lecture, you remember the business model canvas, all the 9 components of a startup.

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

Now we finally come to the last part of the business model canvas.

They need to understand the external environment and they need to come in.

I can't emphasize enough that the business model canvas is just a start.

Who are your key partners and suppliers?

You're all familiar with the business model canvas.

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

So again you could start either with customer segments or you could start with a product and value prop itself, it really doesn t matter.

So in our last lectures we talked about value proposition, customer segments, distribution channels, customer relationships get, keeping and growing customers.

And that can't be repeated enough.

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?

Notice by the way, while they were working on value proposition, they also had some hypothesis about the customer segments.

And by the way, we're going to ask later for who are you building it and what exactly does it solve for those people?

So one of the interesting equations for every startup is that

That was the customer acquisition cost, CAC, here.

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.

Just as a reminder, what the teams will be starting with in Week 1 is filling out the business model canvas and getting out of the building and testing their hypotheses about the value proposition, customer segments, and channel.

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?

But today, we're going to talk about the first box, value proposition.

I'll give you some examples.

Your suggestion is of no practical use.

His suggestion is worth considering.

Let's take a look at some value proposition examples.

The next is channels.

More than likely we'll make money from royalties and commercial licensing, etc.

And then, as they went down, they kind of understood.

So today, while we're talking about value proposition, value proposition works hand in hand with who your customers are, which we'll be talking about in the next lecture.

So those were kind of missing, but again starting with pains and gains was pretty good for their value proposition.

Well, remember this was to acquire a customer.

His suggestion is worth considering.

His proposal counted for nothing.

So as we said, understanding these 3 components of value proposition work together with understanding the 3 components of customer segments.

I think his suggestion is worth considering.

Because the alternative to pricing on cost is pricing on value.

How do you actually make money from your product and service being sold to customer segments?

Square team did wonderfully, they actually started with the archetype.

Again, your CAC declines. The idea is what can you do to make this very efficient?

You need to understand that these people this archetype I'm trying to define are they users or the payers, are they regulators, or they're somewhere else in the buying process.

The value proposition for a company that's selling services is kind of the same.

That is they were beginning with a series of hypothesis about their customer archetype.

And all this depends on your knowledge that you've just learned about the customers, their reaction to the value proposition and all the work you've been doing outside the building.

One of the most important metrics to think about now that we have an end to end funnel is something called lifetime value and a lifetime value LTV is not your lifetime but your customer's lifetime.

And their features match the pain and the gain.

And just if you remember, by the time you understand you have multiple segments, that means you need multiple value propositions and multiple revenue streams.