What's Your Value Add?
Making money is at the core of building a business. With this being said - customers will not purchase a product unless there is a very clear reason as to why they should. For B2B companies, that value add is typically going to be related towards increasing customer engagement or decreasing operating costs. There are definitely a considerable number of potential ways to add value other than these, but without a doubt, these are the most common.
One of the things that really impressed me about Underground Ventures' first portfolio company, MedFlik, was Dr. Harish's innate understanding of MedFlik's value add for his customers. Much of this comes from his and Radhika's experience handling the referral process, which highlights why industry expertise is so valuable when building a company.
MedFlik's value to its customers - physician practices - lies in its ability to improve customer retention rates, ultimately directly impacting a practice's bottom line. Because the referral process is so fragmented and cumbersome, it often takes entirely too long for patients to get their appointments booked. While MedFlik clearly adds value to patients by decreasing their wait times for follow-up appointments - this is not the company's business case. MedFlik's business opportunity lies within the fact that over 1/3 of patients don't attend their appointments, leaving physicians practices with substantial unrealized revenue. If MedFlik can convert just 10% of the patients who don't attend their follow up appointments, the company will help physicians practices generate an average of $109,000 in additional annual revenue.
It is important for any business to understand that the easiest way to make customers happy is to have a positive financial impact on those customers. If you are selling to businesses - make sure that you can clearly articulate how you can bring them more customers or save them money and what the financial impact on their business will look like. Good luck building!