Page 368 - Value Proposition Design: How to Create Products and Services Customers Want - PDFDrive.com

Stress Testing with Numbers: A MedTech
Illustration

A great value proposition without a financially sound
business model is not going to get you very far. In the
worst case you will fail because your business model
incurs more costs than it produces revenues. But even
business models that work can produce substantially
different results.

Play with different business models and financial assumptions to find the best
one. We illustrate this with the medical technology illustration on this spread. We
sketched out two models both starting from the same technology that enables
building a cheap diagnostic device.

Prototype 1 generates $5.5 million in revenues and a profit of $0.5 million.
Prototype 2 starts from the same technology but produces more than $30 million
in revenues and a profit of $23 million with a different value proposition and
business model. Only the market can judge if either model could work, but you
certainly want to explore and test the best options.