Craft a Winning Value Proposition
Part Three of my Ten part series on Building your GTM from Scratch in 2025
Hello friend,
This is part three of my Ten-part series on Building a GTM from scratch in 2025.
Edition 3: Crafting a Winning Value Proposition → This Post
Edition 4: Channel Strategy: Picking the Right GTM Channels
Edition 5: Go-to-Market Motions
Edition 6: Building Your GTM Playbook
Edition 7: Pricing and Packaging for Success
Edition 8: Metrics That Matter
Edition 9: Scaling Your GTM Strategy
Edition 10: Real-World GTM Success Stories
Alright, let’s do it.
Housekeeping:
As always, here is some basic housekeeping stuff:
Most value props in 2025 sound identical - "AI-powered", "revolutionary", "game-changing", "and time-saving". We need to move past these clichés.
Your value prop isn't just a statement - it's the foundation of your entire GTM strategy. It’s not a one-time thing.
The CFO (money controller) is your toughest audience. Time savings alone won't cut it anymore. It has to translate directly into $$$.
The New Rule of Value Propositions
Here’s how I think Value Prop needs a revamp in 2025.
If you're an early-stage founder, you've probably written something like:
"AI-powered solution that saves time"
"Revolutionary platform for [insert industry]"
"Next-generation tool for [insert problem]”
“AI Agent for [insert a product]”
These generic value props don't just fail to convert - they actively hurt your chances of success. You are just another product and with the rise of LLMs, product differentiation will become even harder.
So, in this edition, I’ll share how you think about developing a value proposition, the different layers involved, test to see if you got it right or not,
The Value Proposition Journey
Every startup's value proposition evolves through four distinct stages:
1. Feature Stage (Where Most Get Stuck)
What it looks like: "We have AI-powered analytics"
Why it fails: Features are easily copied, especially in 2025
Red flag: If you're leading with technical capabilities, you're here
2. Benefit Stage (The First Step Up)
What it looks like: "Save 40% on analysis time"
Why it's better: Connects to business impact
Still not enough: Benefits are becoming commoditized
3. Outcome Stage (Where Deals Start Closing)
What it looks like: "Launch products 2x faster"
Why it works: Speaks to business objectives
Key difference: Focuses on what the customer achieves
4. Transformation Stage (The Holy Grail)
What it looks like: "Become the category leader"
Why it's powerful: Speaks to strategic ambition
Success indicator: Customers buy into the vision, not just the tool
The Stages of Value proposition
The Three Layers of an Effective Value Prop. Each layer represents your startup’s stage.
Think of your value proposition like a pyramid - each layer builds on the previous one, creating an increasingly strategic impact for your customers.
1. Basic Value (The Foundation)
This is table stakes in 2025. It's important, but not enough to win on its own.
What It Includes:
Cost Reduction
Lower operational expenses
Reduced tool/vendor costs
Smaller team requirements
Time Savings
Automated manual tasks
Faster workflows
Reduced meeting time
Efficiency Gains
Better resource utilization
Streamlined processes
Fewer errors
Success Metrics:
X% reduction in operational costs
Y hours saved per week
Z% improvement in throughput
Example: Grammarly's basic value prop was: "Fix errors in real-time and write better content"
Why It's Not Enough: In 2025, with AI commoditizing basic efficiency, you can't compete on this alone.
2. Strategic Value (The Differentiator)
This is where you start creating a real competitive advantage for your customers.
What It Includes:
Revenue Impact
Increased conversion rates
Higher customer lifetime value
New revenue streams
Competitive Advantage
Faster time to market
Better customer experience
Superior data insights
Market Differentiation
Unique capabilities
Novel approaches
Industry-specific solutions
Success Metrics:
X% increase in revenue
Y% improvement in market share
Z% better customer satisfaction scores
Example: HubSpot's strategic value prop: "Transform your entire customer experience from first touch to advocacy"
Why This Works: Connects directly to business outcomes and executive priorities.
3. Transformative Value (The Game Changer)
This is where category-defining companies play. It's about fundamentally changing how your customers compete and win.
What It Includes:
Industry Disruption
New business models
Market realignment
Changed customer expectations
Category Creation
Novel solution approaches
New market spaces
Unique positioning
Market Leadership
Industry influence
Thought leadership
Standard-setting
Success Metrics:
Creation of new markets
Industry-wide adoption
Fundamental business model changes
Example: Stripe's transformative value prop: "Increase the GDP of the internet"
Why This Wins: Goes beyond features and benefits to paint a picture of fundamental market transformation.
How to Layer Your Value Prop
The key is to build your value proposition across all three layers, but lead with the highest level that you can credibly deliver:
Early Stage (Pre-Product/Market Fit)
Start with Basic Value
Prove it consistently
Gather evidence for Strategic Value
Growth Stage (Post-Product/Market Fit)
Lead with Strategic Value
Keep Basic Value as support
Begin building Transformative elements
Scale Stage (Category Leadership)
Lead with Transformative Value
Use Strategic Value as proof
Maintain Basic Value as foundation
Remember: Your goal isn't to abandon lower layers as you move up - it's to build upon them. The most compelling value propositions in 2025 will demonstrate impact across all three layers while leading with the highest credible level.
Horizontal vs. Vertical Value Props
One of the biggest strategic decisions you'll make is choosing between the Horizontal and Vertical Value props. I have seen founders dabbling in both of them. Picking one will decide your future roadmap, strategies, growth, and success.
There are pros and cons to each. But its paramount to select the right one.
Horizontal Value Props
Examples: Notion, Slack, Zoom
Advantage: Larger market opportunity
Challenge: Higher competition
Best for: Platform plays, collaboration tools
Vertical Value Props
Examples: Veeva (Life Sciences), Toast (Restaurants)
Advantage: Deeper domain expertise
Challenge: Smaller market size
Best for: Industry-specific solutions
The Value Proposition Testing Framework
Before you go all-in on a value proposition, test it across these dimensions:
1. The Customer Reality Test
Does it connect to an existing pain point?
Can you prove the impact in < 30 days?
Is it solving a "must-fix" vs "nice-to-have"?
2. The Market Differentiation Test
Replace your company name with a competitor's
If it still works, keep iterating
Find your unique angle
3. The CFO Test
Can you quantify the impact?
Does it affect core business metrics?
Is there hard ROI beyond efficiency?
Real-World Examples for 2025
Early-Stage AI Company
Bad: "AI-powered content optimization"
Better: "Turn one piece of content into 10 high-converting variants"
Best: "10x your content team's output without hiring"
SaaS Analytics Tool
Bad: "Real-time analytics platform"
Better: "Spot revenue risks 2 weeks before they impact your business"
Best: "Never miss a quarterly target again"
Developer Tool
Bad: "Modern CI/CD pipeline tool"
Better: "Ship features 3x faster with 90% fewer bugs"
Best: "Give your engineering team their weekends back"
Common Value Prop Mistakes in 2025
The AI Trap
Leading with AI capabilities
Focusing on the technology, not the outcome
Failing to differentiate from other AI solutions
The Everything Trap
Trying to appeal to everyone
Listing every possible benefit
Diluting your core value
The Feature Trap
Focusing on what your product does
Missing the business impact
Getting lost in technical details
Your value proposition isn't just a marketing message - it's the foundation of your entire go-to-market strategy. In 2025's competitive landscape, getting this right is often the difference between scaling and stalling.
Next week, I’ll dive into Channel Strategy and how to pick the right GTM channels for your startup in 2025.
Thank you for reading!
M.
P.S. What stage is your value proposition in? Reply to this email and let me know - I read and respond to every message.