Hello
In this session,
we are going to talk about the three sub-sessions
The first one is value proposition,
and the second one is product market fit
And the last one is the
discussion with the real startup that I invited
Okay, let's begin with the value proposition first
Value proposition,
we talk a lot about the value proposition in the field
The term of the value proposition came from the field
So in academia,
not too many scholars discuss about the concept
of the value proposition so far
We just talk about the value proposition
without any specific understanding of that
Just ask your friends,
what is the definition of the value proposition?
Although he or she talks about the value proposition a lot, many times,
probably they don't know the exact meaning
So right now,
we delve into the real and clear meaning of the value proposition together
To understand the value proposition of your company, of your startup,
we need to understand the basic concept of the value
What is the value?
We say, wow, it is valuable
Yeah, I feel value
But what do you mean by the value?
So in order to understand the value very clearly,
we need to understand the history perception about the value
Well, actually, there are two different types of scholars,
thinkers who think about the value differently
Look at the picture
The first guy is Karl Marx
He's very famous
He is a German thinkers
who argue that the labor theory of the value
On the other hand, the right side, he is a Karl Menger
He is an Austrian economist
He emphasizes on kind of a free market,
and he suggests the subjective theory of the value
What is the labor theory of the value?
Let's begin with the labor theory of value
According to labor theory of the value,
value is something based on the labor time
labor input
Specifically, they argue that
the value can be determined by amount of the labor time
So the labor time is very important input
For example, if you put a lot of time
for your labor on making something,
then it is valuable
It's pretty easy to understand
For example,
what about the watch craftsman?
Look at him
He is an expert, maybe
Maybe he's an expert, and probably he spent a lot of time to be an expert
He has been trained
as a watch craftsman for many years
Then when he makes great watches,
and when he fixes the great watches, it takes time
It really takes at least 15 days or 10 days
to fix one watch
It will take one month to make great watches
So that's why Switzerland watches are very expensive
Mainly because of the amount of the labor time
of the watch craftsman
Same thing happened to the bespoke tailor craftsman
Same, he has been trained as
the tailor for many years
And then he became an expert
on tailor market
Then think about when you make your bespoke suit, it will take time
It will take at least one month to make your bespoke suit
So that's why the bespoke suit is very expensive
compared to the already made mass market, mass-made suit
So it is mainly because of the amount of the time, labor time
This is what we perceive as value
Think about labor theory of the value
It is not relevant to entrepreneurship
unfortunately
Why?
Because in the entrepreneurial area, we need to think about kind of consumer side
the consumer side
Do you remember the peppers, right?
The peppers are very cheap in India,
but very expensive in Europe
Of course, there are huge effort and energy and time to get the peppers
from Europe, but
But, the reason why peppers
is expensive is that the European people at that time needed pepper
So in this case, we need to think about the value different way
Value can be determined not by the amount of the time,
but by consumer's need
If so many people need certain particular product or service,
then, consumers perceive
your product or service is valuable
This is what the subjective theory of the value argues
According to the subjective theory of the value,
value is determined by consumer's preference and
and the perceived utilities,
not by labor input
But by consumers preference
So, the value also is not product itself
Value cannot be determined by function of the product,
function of the service
So, the value is in the eye of the beholder,
not in the objective itself
For example, Bitcoin
Do you know how much is the one Bitcoin is right now?
Right now, one Bitcoin price is more than $100,000
And what is the kind of,
what about the functional value of the Bitcoin?
Is there any functional value of the Bitcoin?
Can you eat Bitcoin?
No
Bitcoin is just data,
just a small file on your computer
That's it, right?
Then why Bitcoin cost a lot?
Why we pay $100,000 to purchase one Bitcoin, one data?
This is all because of the people perceive the value
through the Bitcoin, right?
So, this is a subjective theory of the value
I want to give you another example
His name is Carl,
I'm sorry, Charles Levinson
Charles Levinson is inventor of the nail polish,
He invented the nail polish in Manhattan
and he started his own cosmetic company
His company was Leblon,
which is a global cosmetic company,
located in Manhattan
He said that,
look at the picture, he said that this is not the lipstick
He said, in the factory, this is the lipstick
and we make a cosmetic, we make a lipstick,
but out of our factory,
it is not just a simple lipstick, it is a hope
So, we sell hope
Wow, please remember this quote
This quote is very insightful
In the factory, we make a cosmetic,
but in the store, we sell hope
Hope is a value
Hope is perceived by the consumers
Consumers feel kind of hope
when they purchase the lipstick, purchased by Leblon
Another example would be kids' summer camp
Look at the kids' summer camp
What do we expect
if you send out your kids to the kids' summer camp?
Kind of five days or 10 days kids' summer camp,
and there are a lot of kids' summer camp,
and there are various programs of the kids' summer camp
What do you expect?
Well, of course, there are river-based programs and campfire together,
and there is a play with the kids
And what do we expect?
Yes, of course
We expect our kids
to be social and to be educated,
and also they took some kind of a risk,
and then they learn something from those kind of activities,
those kind of programs
Those are kind of the benefit of the kids' summer camp,
based on the program, based on their service
If we are religious,
then you can send out your kids to the kind of certain religious kids' camp,
and then in this religious kids' camp, and they pray together,
and your kids can become,
kind of a holy man
It's a very religious kids
So you expect that
So those are all about
related to the programs of the kids' camp
But is it all of the benefit?
Okay, and what is the value for you?
Is there any real value for the parents?
Think about it, what is the real value for you
if you send out your kids to the kids' camp?
10 days
Oh my god
Then, you can have some
great time with your partners
You can have a great time with your husband, with your wife
If you miss your kids, then you can just make a phone call simply, right?
It's just face check
That's it
While you are drinking wine together
Wow, it's great
It's a romantic time, right?
Romantic time is expected
What kind of other values if you send out your kids' camp?
You send out your kids to the kids' camp?
Then, yeah, yes,
of course, you know, you don't have to wake up early in the morning, right?
You can sleep all day long
because right now you don't have kids, right?
Wow, it's a kind of freedom
You are free out of kids
This is kind of a real value for the parents
Do you understand that?
What is the subjective theory of the value?
Let's look at another example
This is a housekeepers
Service of the domestic helpers
If you hire housekeepers, then what do you expect?
Yes, of course, housekeepers will
clean the house, mop the floor, right?
And of course, they are preparing for the delicious food
They will make food
This is what we expect from the housekeeping service
But is that all?
Is that all value you perceive when you
hire housekeepers?
Think about you spend your money,
then what kind of benefit?
So you spend the money, you know, to make your house just clean
That's it
You spend the money to have a kind of food
That's it
No, you know why you spend your money
to purchase, to use the housekeeping service?
Because sometimes,
sometimes you need what?
You need the time for your career
I don't have time to work
So that's why I hire housekeeping service, right?
In order to develop my career
Time for work
Career development
And also these days, I don't have any time,
to play with my kids
Because of the redundant house chore
And I'm not good at making food
It's kind of stressful
So that's why I invest my money
to use housekeeping service
to relieve your stress
and also have time with your kids
It's kind of family happiness
So the housekeeping service has a
kind of many values perceived by the consumers
This is what subjective theory of the value argues
Well, I prepared for a very interesting video clip
Let's look at the company
The company name was Frytok
And Frytok is based, located in Switzerland
Let's take a look at how they are working
and what is their final product?
Let's take a look at it together
So did you finish watching?
What do you think?
Isn't it interesting?
Well, basically, they
try to make messenger bags
Messenger bag is waterproof, which is great
But did you see the materials?
The materials itself is not fancy, right?
The materials is a truck cover, right?
Truck covers
They use the truck cover
Use the truck cover
It's abandoned truck cover
And they get the truck covers and
they wash them, clean them
Then they cut the truck covers
And with this cut truck covers, they made
very unique messenger bags
So basically, basically, they make the bags
from garbage
They even use the safety belt
They use the safety belt
They use a tire
They use any, anything,
anything from the abandoned car and trucks, truck covers
This is very interesting
So, so they made these types of bags, right?
You can see the EMA, EMART,
probably EMART in Korea
We have EMART in Korea
And probably there is a EMART truck
And there's an EMART cover
And the company got the truck cover from the EMART truck
And they wash and clean them and cut the,
the cover, you know, truck covers
And made this unique, I don't know
The messenger bags
Well, in 1993,
two brothers, the Markers and Daniel Freitag
They are, graphic designers
The design, those types of bags,
waterproof bags
Because they need waterproof bags
for the commuting bicycles in Switzerland,
where it rained more than 127 days a year, right?
The heavy rain area
So they began,
upcycling all the truck cover to create a messenger bag
And then they generated huge revenues
How much?
$13 million revenue in 2024
Think about it
Can you,
will you purchase these types of bags?
Are you willing to purchase these types of bags?
Yes
Some of, some of students say yes
Some of students hardly, you know, no
Then I asked a student,
if you want to purchase these types of bags, why?
And then they said that, yeah, it can be cheap
Then I replied to the student,
hey boy, it is not cheap
Please check out the prices of this bag
In Korea, this bag, how much?
This bag cost, at least $300
Think about it, you should pay at least $300
to purchase this e-mart bag
from the store
And the bigger one, bigger one more than, you know, $500
And then they said that, oh my God,
student feel surprised
And then they change their mind
If the price is so high, then I will change my mind
Then still, other students really want to get these types of bag
Even if the price is higher than they expected
So I asked them, just why?
Why you need these types of bag?
And the student said that,
yeah, that's, this bag is waterproof
And I can use this bag while I'm
while I'm riding the bicycle
Okay
It's a, what is, what's the value for you?
Yeah, that is a functional value
Guys, I asked ChatGPT to draw this picture
And I explained the situation
Yes, one lady ride a bicycle and there's a heavy rain
Other people's wear the umbrella,
but she wear the Freitag bag, messenger bag
And she enjoy his, her riding
Then ChatGPT drew this picture for me
Wow. It's great
So this is the value of the functional, the reason
This is a functionality
Yes, it's a waterproof bag
So why not?
So we, we feel the valuable
And is that all?
Is the, is the worth, worth doing?
Is it worth for you to purchase expensive bag
just for the waterproof?
Probably there are more than that
What it is?
Yes. Yes. Okay
So if you purchase these types of bag and if you wear this bag and then,
and then, people see you, when people see you,
then the people believe that you are kind of,
the eco-friendly person
So this bag is not just functional usage
This bag is a kind of, kind of a symbolic usage
It's a kind of a symbol of your preference
So you don't have to explain who you are
You don't have to explain
Yes, I am, I'm really careful the environment,
So I want to save the earth for you, for me
So I'm, I'm kind of this types of person
You don't have to, you don't have to explain yourself
if you have this types of bag
Look at this picture
This man just drink coffee in the coffee shop
And then he wear the messenger bag, the Freitag bag, you know, this,
this cost, I think this cost more than $500
So he invested $500 to
get the image of the green consumers,
image of eco-friendly consumers,
image of the, of the consumer
who care for the environment
This is a kind of a symbol of eco-friendliness
You see the differences?
And what else?
Think about all the values
The messenger bag,
again, the messenger bag made from
the abandoned truck covers
And as you see,
as you see the e-mart messenger bag,
there's only one bag in the world
Only one item
If you are a person who care for fashion
or style,
then you know what I mean by
the uniqueness, right?
There's only one bag in the world
Wow, it's very unique
So it is valuable for me to
have this unique item
So look at this picture
Everybody wear the black jacket,
but you got Freitag, it's a very colorful bags
Why?
Because it is very unique and it make you stylish
So it is a uniqueness and stylishness
provide the kind of value for you
So that's why, although the price is expensive,
it is valuable for you to purchase these types of product
You see the real value for you?
This is what subjective theory of the value argue
So what is the value proposition then?
Value proposition is a clear and concise statement
that explain your unique value
that your company deliver to your target consumer
You expect that
if the consumers purchase our product or service,
then our consumers will perceive
A, B, C types of value
So you expect those types of value in advance,
then you just write down your expected value
This is a value proposition
And there is a very useful framework
for you to identify your value proposition
Look at the jobs, pains, and gain
We say it is a jobs, pains, gain framework
What do you mean by that?
Jobs, pains, gains framework
Value proposition answers the job
What kind of jobs your consumer is trying to get done
What kind of job?
Job is very important
Your product help your consumer
do the job very well
This is the job
And what about pains?
Why consumer use the product or service?
They feel some kind of the pain
When they use the existing product or services
So you figured out the pain point of the current consumers
Then your product or service
can reduce those types of pain point,
or hopefully just get rid of those types of,
the pain point
And the last one,
what gain does consumer get from your product or services?
This is kind of additional value
Non-exist, non-exist before
But if the consumer use our product or service,
then probably consumer,
again, consumer gain kind of non-exist
the values
This is kind of a gain, okay?
So the jobs, pains, gain framework
Please remember jobs, pains, gain framework
Well, I prepare for the interesting video clip
This guy, you know,
this guy is CEO of the Lunit
Let's take a look at the video together,
and we will continue to talk about the value proposition
What do you think of the video?
What do you think of his explanation?
Yes, his explanation was very clear and concise,
and he provide some, his value proposition
And when hospital listen to
his presentation,
then probably the hospital consumers
understand what is the value
They immediately understand the value
from the Lunit service, the Lunit product
So Lunit services is kind of AI-based diagnostic tool
that help medical doctors to identify
some kind of disease very quickly and accurately
This is the kind of the Lunit software,
Lunit's core product
So anyway, thanks to the clear value proposition,
so many hospitals globally
already adopted the Lunit software
in order to increase diagnostic accuracies
and decrease the medical cost
and provide some appropriate treatment
for the urgent patient
So let's apply the jobs, pains, gain framework, okay?
What jobs is the consumer trying to get done?
In this case, the job,
and, I'm sorry, in this case, the consumers
Consumers are hospital,
in and out of a country, right?
The global hospital or local hospital
So what jobs the hospital trying to get done?
Hospital tried to
figure it out,
the disease before
So they took some kind of examination
They took a mammography or they take an X-ray for the chest
This is a current job
that the consumers try to get done, right?
This is a diagnostic mammography
for the woman's breast disease
Then what pain point?
What pain point does the product relieve?
So the current hospitals,
current hospitals suffer from existing pain point
what are they?
There are many, many, many pain point
for the hospitals
So for example, diagnostic errors,
there are many diagnostic errors,
and unnecessary tests,
and missing appropriate treatment for the urgent patient
So currently,
the existing hospitals suffer from those kind of,
pain point
when they use the existing product and services, right?
But if they use the Lunit software,
then they can reduce,
significantly reduce the diagnostic errors
and unnecessary tests,
and they significantly provide appropriate treatment
for the urgent patient
So the Lunit software
can help them to eliminate the current pain point
The last one, what gain?
What gain does the consumer get
when they use our Lunit software?
Probably they can get
detection accuracies,
they can get increased detection accuracies,
and then they can get reduced cost, right?
They can reduce the cost, the 40%, do you remember?
And also, they can increase patient experience
They can satisfy the patient,
and then probably later they can attract more patients,
right?
So this is the gain from the usage,
using the Lunit software
This gain is something new
These gains never existed before, right?
So that's why these are all Lunit's value proposition,
right?
So right now,
when we write down the value proposition,
you just focus on the gain, right?
But before you write down the gain clearly,
you need to think about the consumer's jobs
and consumer's current pain point, okay?
These are kind of basic
I want to give you another examples
Again, I asked Chet GPT to draw the situation
Look at the picture
This is Manhattan
And Fulton Street,
I think it's very close to the 9-1-1 zero ground,
maybe Fulton Street
And then, one of the guy,
one guy tried to catch the taxis on the street,
from the Fulton Street, okay?
Then he catch the taxi,
then inside the taxi,
he talk about his destination
the, for example,
I want to go the Empire State Building, okay?
From the Fulton Street to the Empire State Building,
it will take, I don't know,
it will take 10 minutes, okay?
So anyway, he discussed about his destination
with the taxi drivers
Then later, he pay with his credit card,
when he arrived
Empire State Building
So this is the process,
how we catch a taxi,
how we use the taxi services
It looks everything fine
and work smoothly goes,
but think about it
When you try to catch a taxis,
then there could be some pain point
What would be the pain point?
Look at the picture
Many times you miss the taxis,
then the taxis already the booked
There's no available taxis
So you don't know how long should we wait
for the available taxis
You don't know, uncertain situation
Think of you have an urgent meeting
at Empire State Building
and you are already behind the time
Then, it is just kind of embarrassing, right?
And second picture illustrated some kind of conflict
between you and the taxi drivers
Sometimes you cannot communicate very well
with the taxi drivers
There are many reasons to think about
You cannot speak English properly
and taxi drivers cannot speak English properly
and you cannot explain your destination properly
and taxi drivers cannot understand where you are going
And also there is some kind of conflict,
the kind of noise, smell
and you just complain about the noise,
complain about the smell
and the taxi drivers argue about these issues
So anyways, there could be conflict
And the last pictures,
the last pictures illustrate the moment,
when you find out no cashes,
no credit card
when you try to pay the taxi fee
In this case, you know, we don't know what to do
You left your credit card at home
and you left your cash at home
Then, you know, what should we do in this case?
So taxi drivers will be upset
and you feel embarrassed
What should we do?
So they are all pain point when you use the taxi service
So that's why one of the company,
Initiated the new types of service
This is Uber
As you already knew, the Uber started application
and the passenger, I mean, the passengers,
passengers just enter their destination
into the application before they use
And then the application ask you where to go
Then you just check out your destination
Then, you just wait for the taxis
So the second step is the nearby taxi drivers
will accept the passengers request
Then the rider, I mean,
the passengers automatically notice
as the drivers, they get close
You can see, you can see how close your drivers,
how close your drivers is approaching
It's kind of a visual
It's a great visualization
Then you can meet and taxi drivers meet together
and the drivers and passengers verify each other's name
and the destination
Hey, Mr. Bae, hey, Mrs. Kim,
you are going to Empire State Building
Yes, I'm Bae
Yes, I'm Kim, something like that
Then the drivers started ride
Then the application gives the drivers the option
to access the turn by the turn direction,
something like that
Then later at the end of the trip,
drivers and the passengers can rate each other
You can, you can see the last picture
you can
you can give it to some stars out of five stars
If you are satisfied with the current service,
then you can just provide five star out of five
To the particular drivers
By doing so,
you feel that you control for the quality of the drivers
So this is Uber
Let's apply the jobs, pains, gains framework
to the Ubers in order to understand
the value proposition of Ubers
So jobs for the consumers
Why consumer use taxi service?
Because consumers want to get their destination
very fast, conveniently
Getting from the point A to point B, that's it
It's a kind of a transportation
And what is the current pain point,
current pain point that they experience?
And what is the pain point to be solved
from the Uber services?
So when we catch the taxis,
and again, there is an uncertain taxi availability
We don't know which taxis is available
And how long should we wait
for the available taxi?
We don't know
And also the price, sometimes the price is not clear
I think it is just, it is at best,
at best just $20 from Fulton Street
to Empire State Building
But sometimes the taxi drivers ask you just $40 or $50
Wow, there is unclear, right, unclear pricing
So you are not satisfied with this unclear pricing
And what about the payment situation?
You left out your credit card, your cashes,
and you don't have anything to pay right now
So it is a problem
So if you use Uber, then you don't have to worry
about those kind of pain point
because pain point already solved,
or pain point already decreased significantly
And the last one, what is the new gain?
What is the new gain to be created by the Uber services?
Convenience, of course, yes, convenience
These types of gain didn't exist
because on-demand, on-demand taxi service
never existed before
And also cashless payment never existed before
And also you can use the Uber
application at night,
and on the weekend, 24, seven days
Wow, it is very convenient
These types of convenience never existed before
It is kind of a newly developed gain,
newly developed value
And what about speed, the timing?
Yes, timing good, and I can expect
when the Uber taxi is approaching,
one minute or two minute later, right?
These types of value never existed before
And what about controllability?
You can control the quality
by putting the star to your drivers
And also the application show you everything
So high level of visibility
So the controllability, high level of visibility,
those types of value never existed before
So we can understand what is the gain
to be created by the Uber service
Convenience, speed, timing,
and controllability, and the visibility
So now you understand what is the true value proposition
of the Uber