Posted in entrepreneurship

Instantaneous Compelling Value Proposition (iCVP)

This is a new jargon I learnt today.

Harry Berry of http://www.nvpllc.com talked about the key criteria for a VC to invest in a startup – instantaneous compelling value proposition.

According to him, compelling value proposition is quite simply:

– Prove to me that this can do the job cheaper by 3x than the next best alternative

– Prove to me that this can do the job faster by 3x than the next best alternative.

Now, he gave an example as to what he meant by “instantaneous”

One day he has to attend a meeting of limited partners (LPs) in London, from whom he was raising the next round of funding. As he stepped out of the office to walk across to Claridges hotel for his meeting, he got caught in a heavy downpour. Neither could he get a taxi, nor he wanted to be dripping wet for the meeting. At that time a passer-by saw him and asked him if we wants to buy an umbrella.

This was like god-send to Harry, who said he would love to and the passerby did not hesitate to quote 15GBP for an umbrella. Surprise of all surprises, Harry took up the offer immediately because he was ready to pay 50GBP and this was  a bargain for him, given his dilemma. This was true value for him, given his situation.

Instantaneous value proposition is something like that umbrella for Harry.

If the customer is desperate to “throw away” his existing solution and start using your solution, then you have what it takes to raise money from a VC like Harry!

Author:

Enterprise Sales B2B Marketing Entrepreneur Yoga & Meditation Teacher

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