People buy your product for 2 reasons: you make them money or you save them money. If you want to grow fast, make that value proposition crystal clear.

A clear value prop is one of the biggest things I look for when I meet with founders.

It needs to be as simple as one sentence. And it needs to be measurable.

Let’s look at two strong value propositions, using case studies from my portfolio…

Save Them Money

North is one of my most successful investments. They plug into your cloud stack to optimize your spending. North can cut your cloud bill by 50%.

That could save a company hundreds of thousands or even millions of dollars a year. All that money flows straight to the bottom line.

“We’ll take one of your biggest costs and cut it in half.” That’s a clear value prop!

Make Them Money

Saving customers money is great. But you can also help them make more money.

That’s what LedgerUp, another great investment of mine, does. LedgerUp automates your invoicing to make sure you collect all the revenue you’re owed.

Founder Joseph Johnson recently worked with a startup that was missing $900,000 in revenue. They had booked the sales but never collected!

Believe it or not, this is super common. Joseph helped them collect that extra $900,000, a huge boost for the startup.

“Pay us a modest SaaS fee and we’ll bring in tons of revenue.” I’m reaching for my wallet right now!

Weak Value Props

Saving you money or making you money are strong value propositions. They’re clear, measurable, and compelling.

For a lot of startups, the value prop is much less clear.

“We enable better team collaboration.” Okay, but how do I measure that?

“We help improve employee satisfaction.” Great, but how does that impact my bottom line?

If your product gives the customer a vague benefit they can’t measure, you’ve got a weak value prop. And you’re going to struggle in sales.

The problem is, the cost of your product is always measurable! I know it’s $1,000 a month, but I don’t know what benefit I’m going to get from it.

At that point, I’m out.

Wrap-Up

Startups win when they provide value to customers. You want that value to be clear, measurable, and large.

Save the customer money. Make them more money. Pick one and lean into it.

I have 34 investments so far. Over and over, the startups with clear value props have grown fast. The rest haven’t.

Practice getting your value prop down to a single, clear sentence. Then work hard on delivering exactly what you promised.

If you can do that, your only problem will be keeping up with the inbound!

There will be no blog tomorrow. I’m speaking at the Single Family Office Summit in New York City. If you’re there, come say hello!

We’ll be back on Friday!

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