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Why you need a validated value proposition in early-stage product innovation

by | May 18, 2022

Thousands of products and services are released into the market every day. Every product claims to be better than its competitors, and every version claims to be better than the previous one. 

Designing your product based on customer needs is a complex task. It involves gathering many different viewpoints and customer requirements that are often contradictory. Businesses need to map those needs, how they plan to respond to them and which ones to address first. 

We spoke to Dimana Grigorova, Head of the Xoomworks Technology UX Practice. She explains why it’s essential to have a clearly-defined and validated value proposition during the early stages of product innovation.  

A user-centric approach

Defining your value proposition is the first step to product innovation. The key to your value proposition is defining the segment of the market you are catering to and how your product will solve a well-defined problem and improve the lives of your target audience. Using a framework like Value Proposition Canvas can help focus the task by putting the end-user front and centre. The aim is to understand your customers’ pain points and develop products and services that remove the problem.

It’s essentially a statement that clearly defines what you are creating and why it matters. Your ability as a company to clearly articulate your value proposition will make the difference between customers choosing your company and product over another.

It’s important to compare your value proposition against your competition to ensure long-term differentiation. However, how you do this will largely depend on the market you are addressing and your product or brand’s positioning within that market. 

Market context matters

Are you setting sail into a blue ocean – an emerging market that no one has touched before, or into a red ocean – a more established market filled with fast-moving competitors? 

A red ocean market is generally saturated with similar products; it’s a known space with clearly defined boundaries where companies are constantly vying to outperform each other to grab their share of the market. If you’re planning to play in a red-ocean scenario, it’s crucial to differentiate your product clearly from others by identifying a gap in the market. 

For those rarer blue ocean opportunities with a winning idea that no one has thought of before, the market is an unknown space; don’t be deceived – it’s not always plain sailing! The main challenge for businesses executing a blue ocean strategy is defining and creating a market from scratch without having other companies and products to benchmark themselves against.  

The importance of validation

Once you’ve defined your value proposition and the market segment you are targeting, it’s time to go out into the market to test and validate it with potential customers.

Guerrilla testing is the most basic form of user testing. It’s used at the earliest stages of product innovation to help validate a concept for a new product or feature. It can help validate concepts for a totally new or significantly improved product at a relatively early stage in the product development process. 

As the name suggests, guerrilla testing is an informal approach to testing that generally takes place in a relaxed and neutral setting such as a café or a park. It’s about testing your raw idea or concept without the need for sophisticated user testing labs or overly engineered prototypes. You simply share your idea verbally or use wireframes to help explain it. When it comes to guerrilla testing, your goals are to get potential users to share their thoughts on your concept. Your aim is to identify their pain points, establish how your product will address them, and understand if it’s something they would be willing to pay for. Guerrilla testing can also help identify unknown competitors in the space. 

Know who you are up against

Once you’ve defined and validated your value proposition, the next phase of product innovation is competitive analysis.

Analysing the competition in detail can be a time-consuming and lengthy process. However, identifying competitor strengths and weaknesses will give you a clear picture of where you stand, what makes your brand unique, and any opportunities for leveraging any gaps in your market. 

Be realistic

Before developing your value proposition, keep in mind that you can’t always address every customer’s pain – or gain. 

The best approach is to focus on what the broadest range of customers consider a top priority in the first instance and iterate from there. 


To understand the Xoomworks approach and our role in helping businesses create compelling and inclusive digital customer experiences, get in touch.

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