The "Value Proposition" and "Philosophy" of Web Services and Apps

"I'm planning to start a business next month and create a web service. What do you think of this idea?"
"I'm planning to raise funds to promote my app. What should I emphasize?"
"Our department is launching this new IT service soon, but honestly, is it a bit iffy?"

Both at Dentsu Inc. and personally, I often receive consultations from IT startup founders and managers of new business divisions at large corporations regarding service launches and strategic approaches like those above. Today, I'd like to write about the upstream aspects of service design that I always consider in such situations.

● The "Value Proposition" and "Philosophy" of a Service

Whenever I receive these kinds of inquiries, regardless of whether I share it with the person asking, there's something I always consider.

That is the "value proposition" and "philosophy" of web services and apps. These are terms I've coined myself: in web services and applications, the "value proposition" refers to "what the service provides," while the "philosophy" refers to "how the service should be" in order to achieve that value proposition. Semantically, it might be close to "policy" or "ideology."

Concepts alone can be hard to grasp, so let's explore service design through a highly simplified example.

For example, let's say I love mikan oranges and want to partner with a farmer I know, Farmer A, to launch an e-commerce site selling mikan online. What would this site offer users and society? Could we build a service that sells a lot? Let's think about it together.

First, let's consider the "value provided" by this service. The most obvious thing being provided is the mikan oranges that users actually pay money to buy. Visualized, it looks like this:

To explore the "value proposition," we need to flesh out this framework and dig deeper.

First, we need to consider who these purchasing users are. As an approach, let's focus on two main aspects: "attributes" like age/location/occupation, and "emotional preferences" like "likes ~".

We'll set a main target and a sub-target. Since more housewives are buying online and having it delivered these days, let's tentatively set the main target as housewives shopping for groceries and the sub-target as people like me, a salaryman in my 20s. This gives us the following:

While we can't be certain in the early stages since there are no buyers yet, it's perfectly fine to base this on assumptions and real-world experience. Let's design this target model. Conducting interviews with potential users is also a good idea.

Based on this persona, we'll refine the use cases for when users buy and anticipate when they might purchase oranges. Realistically, we can't expect these users to buy oranges every single day without fail. Also, with oranges sold at the local supermarket, would they actually search for and buy them on a website? Let's consider the challenges and reasons for buying and add them to the list.

And here's the crucial point: with this use case, the user considers what they might gain beyond the mandarin oranges themselves—the "visible value"—by having them delivered. Looking at the diagram above, it becomes clear that when using e-commerce, the satisfaction derived from the convenience of being able to buy a selection of favorite mandarin oranges in bulk, overcoming physical and time constraints, is important. Therefore, the value proposition that becomes the reason for using this e-commerce platform can be stated as "the convenience of efficiently purchasing a selection of favorite foods in bulk."

Furthermore, to achieve this value, it becomes clear that three elements are necessary: the availability of preferred food items, efficient purchasing, and the assurance of reliable delivery.

Only then do we move to designing the service. We consider "positive ideas"—features we should actively incorporate because they'll improve things—and "negative ideas"—elements we should eliminate from the design because they're unnecessary.

If bulk purchasing is important, we could include "bulk buy" in the site title. If customers like mandarin oranges, we could treat other citrus fruits similarly. Home delivery should probably support scheduled delivery times.

Conversely, even if both target groups want to buy in bulk, since the focus is on single-person households and families of one, too many items would spoil quickly and make the purchase unappealing. Also, while Farmer A is an acquaintance, that's not a key selling point here. To summarize:

Ideally, we'd prioritize development from here, but we'll skip that step this time.

Summarizing this brings the service's concrete form into sharp focus. The title will likely change too. We'll emphasize the ability to buy in bulk and the convenience of delivery. Finally, we'll source summer oranges from Farmer A—a variety likely to appeal to those who enjoy mikan—and offer them in the same format.

This process makes it immediately clear what the service should provide and how it should be, enabling service design aligned with these principles. As you organize the "value proposition" and "philosophy," core principles and guidelines emerge, revealing what should and shouldn't be done.

For example, for search listing ads, you'd definitely want to secure the keyword "bulk buy oranges." To reach homemakers, you might advertise on Cookpad while also posting lots of orange recipes on social media with subtle links. You could even put up billboards near stations in suburban areas close to the metropolitan area.

While this example is very simple, applying this methodology to real cases facilitates smoother decision-making for PR messaging points, growth hacking initiatives (as previously introduced), and marketing/campaign strategies. It also naturally drives optimization.

Moving forward, as we operate the service, we'll continuously run the PDCA cycle for improvement. This includes redefining our target audience based on buyer insights, testing previously unused ads or UI elements through A/B testing based on campaign responses, and refining individual initiatives from upstream design to downstream execution.

This time, starting from the business idea "We want to sell Farmer A's mandarins," we proceeded as follows: ① First, we considered the sales mechanism, ② then identified the likely buyer demographic as our target, ③ subsequently organized the patterns in which the target would purchase, ④ then considered the value inherent in e-commerce, and ⑤ finally refined the idea. However, in practice, for steps ① to ③, the target may come first, or the use case may be identified first, leading to a deeper exploration of the target profile. Therefore, when considering the value proposition, the order is not fixed.

In fact, the approach to uncovering the emotional value that becomes this service's "value proposition," and the method of creating guidelines from the brand's core competencies—which I've described here as "philosophy"—are also fundamental to media planning in advertising agencies.

● The Importance of Establishing a Core for Web Services and Apps

The world of web services and apps has low cost barriers to entry. Technologically, unless special techniques or patents are involved, they can be replicated if you can secure engineer labor costs. This makes follower strategies (i.e., imitating or following leading players to capture market share) relatively easy. Modifying and changing the core functionality is also simpler compared to other industries.

Precisely because entry, modification, and exit are so easy, the focus tends to shift toward speed. This often leads to a tendency for even business leaders to lose sight of or dilute their thinking around core "value propositions" and "philosophies."

Personally, I think the stance of starting services based on somewhat intuitive reasons like "It seems vaguely interesting!" or personal motivations like "I like it!"—as in the earlier example—and continuously creating more services is perfectly fine precisely because entry is easy.

However, precisely because similar services can be created so easily, continuously thinking about "what to provide" and "how to be in order to do so" is crucial for enhancing a service's strategic approach and ensuring its ongoing development.

Next time, I'd like to introduce approaches to adoption strategies for web services and apps.