Finding and Testing Value Propositions for Stakeholders

NACCE October 2013 Norris Krueger, PhD

a. Find as many stakeholders as you can, especially those who play significant

roles in the ecosystem (e.g., the liaison-animateurs.) The list is a lot longer than

you may realize. (http://goo.gl/EJWwGE ).

b. For each, understand their intended “job” & related pain/gain points.

c. Do this in the context of growing a healthier, more entrepreneurial local

ecosystem. Community colleges play a critical role in “defragging” their local

ecosystem [defrag] Map. Listen. Understand what makes your economy tick.

d. Mapping the ecosystem is critical. Most people do it badly. Done right, you will

find not only more stakeholders, you will understand the key leverage points.

OK, what IS a “value proposition” anyway?

First, a quick primer on value propositions. In a minute we’ll look at Alex O’s latest tool, the

Value Proposition Canvas. If you liked his Business Model Canvas, you will like this too!)

The business model is what you are trying to create also has three key elements:

1. Value identification – this is the value proposition but we want to be utterly obsessed with

keeping in mind that the value is for the customer/end-user/beneficiary, not for us. The

opportunity = creating value for someone/something. (Fortunately, this focus is something

that community colleges are particularly good at!)

2. Value delivery – how are you going to create the value in practice? What will it cost?

3. Value capture – who gets “paid” and how? (If I said “How do the economic & noneconomic

rents get allocated, including negative externalities?” you’d quit reading! ;)

A great idea to create great value for a stakeholder still has to be deliverable without anyone going

broke or to jail.

However, it all begins & ends with the value proposition, the value for the customer in their own

eyes. That means being very clear about the critical assumptions you are making about each value

proposition. And being prepared to ruthlessly test even the most obvious assumptions.

The Value Proposition’s Key Elements

Stealing from Alex O, we need to know three things (if possible).

1. Customer “Jobs” (Clayton Christensen) – what are the end results that the stakeholder

wants to see happen?

2. Pain Points – even if small, what is it that prevents the stakeholder from being effective at

what they want to do?

3. Gain Points – what are they tangibly trying to make happen?

Value Proposition Canvas: http://businessmodelalchemist.com/2012/08/achieve-product-market-

fit-with-our-brand-new-value-proposition-designer.html (TL; DR version: just read this after you’ve

identified target stakeholders.)

A school may want to see higher student test scores (gain) despite bureaucratic hurdles (pain) but

the “job” is student mastery of intended behaviors. Often a subtle difference but sometimes the real

value proposition is a way to help stakeholder do their “job”, not just complete tasks. Some

stakeholders need help with one but want help with another. At the outset, focus on the latter. It

makes testing the critical assumptions a lot easier. For now.

Distinctive Competence not Core Competence

Another place where it’s so easy to slip up. Too often we focus on what we do best, not

where we add the most value in the eye of the stakeholder. Too often what we are really good at…

is not at all where we add the most value. (And it is very often not what we want to do1.) Using

these tools forces us to see through the eyes of the end user/customer/stakeholder.

But having said all this…. Shall we get started?

Sometimes we can see obvious connections such as where we are already providing great

value. For community colleges, we are already typically knee-deep in workforce development and

professional/technical training. We should already have a pretty well-validated sense of the pain

points, gain points and customer jobs. Start with “what else do they want?”

What other stakeholders have these same issues? Similar?

Are you asking??? [As Yogi Berra said, “You can hear a lot by listening.”]

CO-Immersion

However, for many community college entrepreneurship programs the pre-existing

stakeholders aren’t enough. If we are to create great value for the entrepreneurial community in

our area, we need to start getting as immersed in the entrepreneurial ecosystem as we are in the

workforce development/training world.

One powerful strength for community colleges is that for us the immersion works both

ways. While it always seems easier for community colleges (than, say, 4 year schools) to get

immersed in the community, it is even easier to get the community immersed in you.

This gives the CC the standing to help pull together (“defrag”) the entrepreneuria l

ecosystem. But… where to start? Stakeholder analysis is at the heart of defragging the

ecosystem but it’s not independent of the other tools we need to use… like mapping.

Efficacy or Impact?

Do you want to quickly find areas where you can deliver great value right now? Or do you

want to really move the needle in your entrepreneurial community? The easy answer is “Both!” ;)

But let’s look at how you might proceed in each.

Immediate Impact: Low-Hanging Fruit

We’ve already touched on this. The odds are that you have already-important stakeholders

who are asking you for entrepreneurship-related help (though they may not know they are. Their

“job” is more innovation and they may not see how entrepreneurial training of their workforce might

deliver that.)

1 Or our mission statement says we do or what our board insists that we do or we feel entitled to … etc.

Where to Look? How about your…. Ecosystem Map?

There are plenty of tools to help you with this. You can simply get started and crowdsource

the list from people in the entrepreneurial community. Let them draw you a map. (Collaborative

mind-mapping software can be remarkably powerful –see the MindMeister tool Empact offers us:

[http://www.mindmeister.com/175146471/entrepreneurship-ecosystem-map]

It helps to have a “map of the map” to guide this, however. For example, the celebrated

Babson Entrepreneurial Ecosystem Project (Dan Isenberg) maps the ecosystem into 6 dimensions

that help ecosystem members to make sure all the bases are covered.

This is important: Get the ecosystem members involved. This is more than just

crowdsourcing. There is a huge risk that one or more institutional actors will dominate the process.

Whether they intentionally hijack the process or just dominate it by default, you don’t have to be

Brad Feld2 to see that the entrepreneurial community is not going to be the dominant voice(s) in

building the map that it needs to be. [Horror stories available upon request.]

I recommend mapping from multiple directions. Again, there is a great mind-mapping type

tool that we are sharing here from Empact [link above] It makes it very easy to get community

members to contribute to the map, easily and painlessly. There are other tools that can triangulate

your findings.

Once this process is underway, I guarantee that you will readily identify at least one

stakeholder in each “box” where their pain/gain/job issues are clear and that you can be helpful.

(It’s ok if it’s something small; the key is to get started. “Entrepreneur” is a verb….)

Impact: Defragging the Entrepreneurial Ecosystem?

Isn’t this a great way for community colleges to contribute to their entrepreneurial

ecosystem? One central distinctive competence of CCs is to play fair broker, to be the neutral turf,

to be the connector and convenor. Take advantage of that. Use the mapping process as a first step

to creating value for all of your stakeholders… including the ones that you don’t even know about

yet!

You can also triangulate the mapping with a simple online survey where you identify key

gaps and overlaps…. as perceived by the entrepreneurial community itself

[http://bit.ly/map_ecosys]. A good map requires a fair, neutral, competent party doing the map (that

is... you!) Other great tools here too from Don Macke: http://goo.gl/ys9DUZ

Understanding the Dynamics of the Ecosystem

However, if you really want to start moving the needle, you want to focus on the major

leverage points of the ecosystem… which may not be obvious. To again use Feld’s terminology, do

you want to help the “leaders” or the “feeders”? Do you want to help the ecosystem players who

are initiating bottom-up activity to support entrepreneurial development or the institutional players?

It’s a lot harder to find ways to help the major players but a lot easier to find them.

2 If you haven’t read Brad’s Startup Communities, put down this document and go read it. Now. (We will wait.) One

absolutely critical essential for a healthy entrepreneurial ecosystem is that it is led by the entrepreneurial community, not the institutions (who should be helping the bottom-up process of entrepreneurial development.)

The best maps of an ecosystem are not the static “laundry lists” but a more functional social

network map that focuses on how the ecosystem members interact. Who is connected to whom?

Or should be? This is a complex, expensive task but there are ways to get started. Look at the link

just above – that survey is a very simple starting point.

The Critical Stakeholders?: Connectors and Gatekeepers

There are two particularly useful actors in any social network (which an entrepreneurial

ecosystem is): Connectors who bridge different actors to each other and Gatekeepers who control

access to important resources. Both play critical roles but differ greatly. Typically, the gatekeepers

are institutional actors and often have a vested interest in controlling access. On the other hand,

connectors tend to be interested in expanding access. The best connectors do more than connect,

they are proactive – we call them liaison-animateurs.

Community colleges function best as connectors. And the best connectors work to help

other connectors. This is not to say that CCs should not look for genuine value propositions to

assist gatekeepers. It may be harder to get their attention but the payoffs can be equally higher.

If you want to build a stronger entrepreneurial ecosystem, be more than a connector, be

liaison-animateurs! Start by helping the connectors. Surveys like the one linked can help you to

quickly identify the real connectors in your entrepreneurial community. You should also look to help

those stakeholders who need connectors: Who are the nascent or struggling or growing

stakeholders who could use your help?

Defragging the Ecosystem, part 2

Another tool that is powerful for identifying who we might help goes back to Yogi Berra:

Listening sessions. Yes, go and talk to possible stakeholders who can lead you to others. But the

very best community development tools share a couple of key dimensions. If you are going to have

a map, don’t need a starting point and an ending point? The Empact-style map can give you a

starting point but where is the ecosystem headed? We have a growing sense of what a healthy

entrepreneurial ecosystem looks like [http://bit.ly/EcoSys] and how we get there but wouldn’t it help

to get a sense of where the entrepreneurial community wants to go? The awesome thing is that

you’ll find remarkable consensus on key points.

Here is where you find the stakeholders that you can help the most. Once we have a sense

of the starting point and desired directions we want to go, it will be evident who are going to be key.

And what is clearly missing? And, best of all, who is stepping up.

If you want your community college to be deeply embedded in the growth of a healthy

entrepreneurial ecosystem, you have the unique opportunity to help those who are going to make

the biggest difference: The connectors and… the future connectors. Community colleges are

designed to be great connectors. In an entrepreneurial economy, this also means helping identify

and nurture great connectors, present and future.

Identify stakeholders; identify what they want (and that you can help with)

Deliver it.

Have fun! And… Entrepreneur Up!

Norris.Krueger@gmail.com 208.440.3747 @entrep_thinking (& Facebook, G+, LinkedIn).