A product or service is defined as a discrete physical good, item of work or activity which is delivered to a customer at a specific time and place (or over a specific period of time), and which is clearly measurable. It should also have a clear price, and you should be clear about the exact costs required to deliver one unit of this product or service.
The core product is basically what the customer is buying from you. This is often more than just a physical product. SolaRise’s core product, for example, isn’t just a solar panel and lights. It’s also the installation of the panel and lights in the home, and an after-sales service where the customer can call an engineer if the Solar Kit needs fixing. For an education venture, the ‘core product’ might be 6 lessons delivered once per week over the course of a school term, plus textbooks, plus access to an online forum to discuss homework. A ‘core product’ might have a number of different features, and add-on services, which customers can pick and choose from.
The point of a core product is standardisation. By standardising your commercial activities into a handful of discrete products/services (rather than designing bespoke services for every new customer), you make it easier for yourself to create a business model that can be rolled out at scale. Standardisation is the foundation for scaling up (which we discuss at length in Module 4).
Standardisation means fixing what you do (and therefore, by definition, being clear about what falls outside your scope), simplifying delivery and costs, and creating a format that can be easily replicated. The case that you are making to investors is that once you’ve made the investment to develop your core products (e.g. writing software, preparing teaching materials, designing a product) you can then replicate them easily.
Please write down as many discrete products and services that you could deliver to the customer groups that you identified in the exercise above. Put each customer group onto a separate piece of paper and then write down each product and/or service on a separate post and stick it on the relevant customer group’s piece of paper. The products or services should be central to delivering your social mission so that you are getting paid for doing your core work, not doing extra work solely to generate income for your mission.
For charities that are transitioning into a social business model, this might be the first time you are defining a product or service you would like to sell, rather than something you are giving out for free to the beneficiary.
However, an investor will be looking at the track record of your venture and showing some type of history will be crucial. If this is the first time your venture is selling things rather than providing your work for free, make sure that you capture your history in a way that is compelling for an investor. For example, show your venture’s deep understanding of the customer, your track record of delivering work in this specific context, and your research on the pricing of the product or service. If you’re a new venture, show how the individuals on your team have track records that make them uniquely positioned to deliver on this product / service.
