Around 90% of startups fail, and nearly half do so because they build something no one actually needs. The root cause is simple: founders fall in love with their idea, skip user validation, and assume the market will care. It rarely does.
Success often depends on clearly understanding the problem, who it’s for, and why it matters — and then testing those assumptions with real users.
Early stage startups often lack this proof, traction or revenue. But founders can offer a clear picture of the user, the problem, and the reason why the product should exist. Investors aren’t looking for numbers yet, but they do expect a story that makes sense.
A clear value proposition does the heavy lifting here. A strong one crystallizes this story, the problem, and the approach to solve it. The unique selling proposition then takes it further — it shows why this product is the best choice.
Here’s how to build both and how to avoid the common mistakes that hold founders back.
What is a value proposition and how to develop it
A value proposition explains what your product does, who it helps, and why should anyone care. It’s the value customers walk away with.
It starts with really understanding your users. Talk to them, listen to their struggles, and find out what they need most.
If your product helps busy moms manage their kids’ health, don’t say it’s “easy to use.” Instead, explain how it saves them time or reduces worry, like “Gives busy moms peace of mind by tracking children’s symptoms and helping prevent emergency visits.”
Avoid vague or generic statements like “We provide innovative solutions” or “We empower users.” People want to know how your product helps them deal with a real problem.
“Provide AI-powered coaching for runners so every workout feels personal” is much better than a long list of features no one understands. Don’t try to say everything at once. Pick the one or two biggest pains your product solves.
What is USP
USP and value proposition are often mixed up. A value proposition says what your startup does, who it helps and why it’s useful. A USP shows what makes your startup different and why people should choose it.
Both work together. A value proposition could be helping parents track their child’s asthma easily. A USP — the only app that sends real alerts based on doctor-approved data.
One explains the value. The other makes you memorable and trusted.
USP shows what makes your startup different from others. It highlights the one thing you do better than anyone else and why customers should choose you.
A strong USP is simple, honest, and focused. It can be about your technology, speed, ease of use, or the people you serve. The key is offering something others don’t in the same way.
Avoid broad statements like “We help with mental health.” Instead, be specific and unique: “We connect teens with school-approved therapists.”
How to test your value proposition
Founders often rush to build, but the smartest ones test demand first. Start by proving it step by step, before committing to scale. Here’s how:
#1 Make sure people desperately need what you’re building
Start by talking to 15 to 30 potential users who should care about your product. If you’re building something for caregivers, ask how they manage medications now, what’s frustrating, and what they wish existed instead.
#2 Put together a simple landing page
Once you understand the problem, test your message. Try two different versions. One might say “AI-powered care platform,” another “Reminders for your elderly parents.” Run a small ad budget and see which one gets more clicks or signups.
#3 Keep your message short
When you share your idea, keep it clear and ask customers what they think your product does. If they don’t get it, your message needs work.
#4 Prove value first
Before writing a single line of code, see if you can deliver the same value manually. Try connecting caregivers with nurses over WhatsApp or email. If they come back, you’ve done a good job.
#5 Test willingness to commit
Offer a pre-order, a waitlist, or ask for a letter of intent. If people hesitate, the value might not be strong enough yet.
#6 Identify what makes users stay
Once you’re live, ask new users what made them choose you, or what they’d miss if the product disappeared. Their answers will show what matters most (it might not be what you expected).
Customers care about outcomes. Show them what problem you solve and why your approach is the right one. If it’s not clicking, go back to your users until the answer feels obvious.
