What is Value Proposition in Entrepreneurship? How to pitch an idea using a Value Proposition Model?

If you own a business or working towards that goal, improving your sales and the way you communicate with your clients or audience is crucial. Stick around to this post and we’ll discuss what is value proposition in entrepreneurship and how it can work in your favor.

What is Value Proposition in Entrepreneurship?

Value proposition consists of the value that a company can provide to their customers through their products and services in case they opt to buy or use them. In other words, a value proposition is a way the companies have to show their customers and potential customers why they do what they do, how the company operates, and what they stand for.

This concept can be part of a company marketing strategy, presented a marketing statement or advertisement with the intention of persuading the customers to buy their products and services not only for the product and service itself, but for the value that they can add to their customers life.

Value Proposition Models

There are several value proposition models out there, but in this post we’ll cover 3 models that I believe cover this topic really well and should be enough to illustrate how you can integrate a value proposition model in your business.

NABC Model

The NABC model is a great way to help you to identify if your business idea is good, because it will make you think of what values it will bring to your customers, and it could also be a great tool to help you prepare presentations and pitches to investors, business partners or clients.

That sounds great, but what exactly is the NABC model?

What is Value Proposition in Entrepreneurship? Illustration representing a pitch using the NABC model

NABC stands for Need; Approach; Benefits; Competition. This value proposition model was created by the Stanford Research Institute (SRI) and is a great tool to help you better organize your ideas and compare the solution that brings the most value to your customers.

To better explain the model, let’s go point by point:


The need is the initial step of your journey, and as the name says, what are the needs of your customers? This seems a simple question, but in order to validate your ideas or to better pitch your company or products, it is essential you know what is the real need of your customers and if your product or service is in fact a solution to these problems.

Here are some questions that might help you in the process to identify the Need aspect of the model:

  • What problems do your potential clients have?
  • What do they actually need?
  • How often do they have those problems or needs?
  • What is the size of your potential market? How many potential customers do you have with that product or service?


Moving on to the approach section, it is important that you explain how does your product or service solves the problems or needs mentioned in the step above, and present that in a way that your target audience can fully understand. For that reason we have created the following questions to help you elaborate on the approach aspect.

  • How do you solve your potential customers’ needs?
  • How do you deliver that solution to your customers?
  • How does your solution works?
  • How is it produced?
  • What is the cost of producing it?


As the name says, it is time to list to your client, investor, or whoever you need to pitch for, the benefits associated with your product or service, and how they’ll help your customers.

  • What are your potential customers’ benefits?
  • Is there a unique touch to your product or service?
  • Is it a good cost vs benefit?
  • Is there a financial benefit? Are there additional benefits?
  • Why would someone use your solution?


In this final part, it is time to identify who are your competitors, and most importantly, why is your solution better than the ones presented by your competitors?

This is an important step to identify all the competition around your ideas because depending on the sector or niche you’re working with, a strong competition could be an entry barrier to this market, and would be good to identify that in an early stage of your business idea.

We have also prepared a few questions to help you to put this section down in your paper.

  • Is there any other similar solutions in the market?
  • Are there other solutions that solve the same problem?
  • Why is your product better than the others?
  • Why should your potential customers by your product or service instead of the competitors solutions?
  • Who is your biggest competitor?

The video below illustrates the points we have just mentioned in the NABC Model and how it works.

Personal experience and opinion on the NABC Model

I’ve personally used the NABC model during my Master degree in Entrepreneurship and Innovation at Lund University while discussing different business models with my colleagues, and in fact, it really helped us to choose the best ideas we came up with by simply trying to create this module and explaining all the points.

If you want to learn more about why I chose to study this Master in Entrepreneurship and Innovation and if it is worth it or not, check out my related blog post and video on that topic by Clicking Here!

Value Proposition Canvas

Value proposition canvas is a model that was created to elaborate your idea in details and display them in a one page visual map that will help you to get a better overall view on how to create value for your customers.

This model helps entrepreneurs to create products that people care about, and that people actually want to have. In the video below, they claim that 7 out of 10 products in the market are not desired by their customers.

What is Value Proposition in Entrepreneurship? Illustration representing a pitch using the value proposition canvas model

The value proposition canvas has two parts, the first being the customer profile, containing details on the gains and pains that your customers may face, so you can focus on those issues.

The second part of the model consists on the value map, where you’ll list your products and services, and providing details on the gains and ways to help your customers issues, what they call the pain relievers.

If you want to learn more about the Value Proposition Canvas and how it works, you can check the following short video.

Golden Circle Model

Golden circle is a concept developed by Simon Sinek, that explain the “Why, How and What” theory, in a context that people don’t buy what you do, but they buy why you do what you do.

In this model he focuses on how people tend to buy stuff, reasoning that you have the early adopters, that are people who understand the purpose of your product or service, and in order to achieve mass market you need to get all early adopters onboard so they prove to the mass market that your products are good.

What is Value Proposition in Entrepreneurship? Illustration representing the Golden Circle model from Simon Sinek

The point here is that for you to get their trust, you need to show them why you do things and they must believe in what you believe. As a joke he makes an analogy of Martin Luther King’s speech, saying that the name of the speech is called I have a dream, and not I have a plan. Meaning that people will follow you because they also believe in what you believe.

In the following video, Simon Sinek explains in more detail his idea of the Golden Circle Model and provides some interesting examples.

How to pitch an idea using a Value Proposition Model?

To better understand what is value proposition in entrepreneurship and how it can help you and your business, it is important to see how you can use those models to pitch your business ideas, products, or services to investors or customers.

It is important to identify that are different types of pitches for different occasions, so before we move on, let’s identify what are the types of pitches you can come across.

Types of pitch

Elevator Pitch

The elevator pitch is a way of presenting your idea, product or service in a real short presentation, that usually is done in a one minute time frame. The purpose of this meeting is usually only to spark curiosity in investors or even in customers, so they can contact you later to learn in more details about your solutions.

This is a great exercise to practice, because if you can present your idea in just one minute in a way that your target audience understand and want to learn more about it, you’re probably in the right direction.

Short Pitch

A short pitch is also presented in business fairs, they usually take from 15 to 20 minutes, it is a more formal presentation than an elevator pitch and you have more time to go into more details of your ideas.

Usually the first pitches you make won’t get you instant sales or investors, but they’ll create opportunities for further discussions and presentations to better clarify your ideas and business models.

Long Pitch

The long pitch is usually done for investors and is the most formal of the three pitches presented here. In this type of pitch, you have more time to present your idea, and you also have an opportunity to elaborate more on other details of your business models, such as the financial projections, feasibility analysis, market conditions, and all other relevant details that your investors might be interested in order to invest in your project.

What is the best model to use?

There is no right or wrong in this case, all the models will have ups and downs, but they’ll all provide you with really important details when it comes to generating more value to your customers.

During my Master course I have really connected the dots when using the NABC model and the golden circle of Simon Sinek. In my personal opinion you’re able to use the “Why” reasoning that Simon mentions in his theory in the “Need” approach of the NABC.

Personally I really enjoyed the NABC, mainly because all the pitches I have seen during an event hosted by Ideon Innovation, which is an incubator partner of Lund University. During this events they recommend that the students use the NABC model to pitch their ideas, and I found them to be really well prepared for the presentations and pitches, providing a clear message to the audience.

Post Cover Photo by Bonneval Sebastien on Unsplash