On paper, we all know this (sell the value, not the product).

Yet, a vast majority of startup pitches, initial website copy drafts, sales materials, etc we see as a Pre-Seed fund are all about “what are we selling” vs “what value are your customers buying”.

To make it more specific, let me give you an example for a startup that sells inventory software (this example was actually written by ChatGPT):

• If the startup frames its value proposition around what it is selling: Our software is a powerful tool for managing your inventory
• If it framed it around the value that the customer is buying: Real-time visibility into your inventory at a fraction of the cost

As ChatGPT then rightfully notes,

“The latter value proposition speaks directly to the customer's pain points and desires, making it more likely to resonate and drive conversions.”

Or, to put it differently, the former is a descriptive way that won’t cause much of a reaction from anyone.

Also, examples of “what are we selling” that come across our desk, typically heavily focus on highlighting product features and the underlying technology with a bunch of “buzz words” that can mean anything and nothing (e.g. “Ai for xxx, using blockchain technology, we are a marketplace for xxx, productivity tool xxx, etc").

The latter on the other hand not only makes the value proposition of the same product much more attractive. It also makes it actually tangible and clear for anyone to understand what you offer them. Because they understand the value you bring.

As a follow-up, I asked ChatGPT to articulate its own value proposition along these two ways of framing it:

• What are you selling: “ChatGPT is a powerful language model that generates human-like text.”‍

—> this is descriptive, feature / tech focused and doesn’t tell us much about what it actually does!

• What value are your customers buying: "ChatGPT: Automate your content, elevate your engagement”‍

—> no features etc mentioned, only about value customers get. Could be improved but much better vs the first example

Which one makes you more likely to want to engage with ChatGPT?

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The last simple example I’ll share to make my point is from Alex Garcia’s blog:

After reading this, have another look at your own value proposition and be honest with yourself - are you exclusively talking about customer value?

If not - I can highly recommend playing around with ChatGPT to get some inspiration for how to best articulate your startup’s value proposition (remember, the more specific you are with your prompts, the better the results - including asking it to refine the initial results).

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👋 - Looking For Pre-Seed Funding?

At focal, we lead pre-seed rounds backing software / platform / infrastructure builders across the 🇺🇸/ 🇨🇦 reinventing how industries operate and business is done.

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