What Makes Value Propositions Distinct and Valuable to New Companies Committed to Scale Rapidly?

Abstract

One of the most valuable resources a company owns is the “portfolio of value propositions” to its diverse external stakeholders, such as customers, investors, and resource owners. In this article, we fill a gap in the value proposition literature by identifying features that make the value propositions of new companies different from other resources, along with factors that make them valuable. A value proposition is conceived as being what enables and improves business transactions between a new company and external stakeholders. We reason that two features in particular make value propositions of new companies distinct: (1) business transactions between a new company and one or more external stakeholders, and (2) investments to create and improve a new company's value propositions that enable business transactions. We provide a definition of “value proposition” and postulate that a value proposition will benefit a new company when it: (1) strengthens the new company's capabilities to scale; (2) increases demand for the new company's products and services; and (3) increases the number, diversity, and rapidity of external investments in the new company's value proposition portfolio.