By Cliff Johnson
In 1987, Supreme Court Justice Thurgood Marshall delivered the lecture, “The Constitution: A Living Document,” in which he argues that interpretation of the Constitution should adapt to new circumstances introduced by time and cultural evolution. Whether or not you believe Marshall’s opinion on the Constitution, you should apply his theory to business and make your value proposition a living promise capable of adapting to market evolution.
Being situated in the rapidly growing alternative accommodations industry, we’ve caused and been on the receiving end of considerable change. Evolving our value proposition has been key to our success, enabling us to react quickly and customize service for new and changing markets. Here’s some advice we’ve picked up during our eight-year history:
Be willing to pivot pain points. All businesses are born to solve a pain point, but the deeper you get, the more pain points you’ll uncover. Research your market and be adaptable. For example, Vacasa was born from frustration at a time when vacation rental homeowners and managers were notoriously bad at updating their calendars and responding to booking requests. At first, we only saw an opportunity to make life easier for guests. After researching the market, we realized there were actually two problems that needed solving in the industry: It should be easier for guests to book homes, and owners should be generating far more revenue. We decided to build solutions for both.
Shape for the future by evaluating your perceptions. When fine-tuning your value proposition, first ask yourself the age-old question: Are you going to be the cheapest, the best or the fastest? We learned the hard way our first year that we didn’t want to be the cheapest. The types of homeowners we want to attract value revenue and the best service. Next, learn which services your customers truly appreciate. Our employees were passionate about providing each home with fresh, local coffee, but we found that guests preferred to bring their own favorite blends. While an unpopular decision among employees, we stopped providing coffee beans. Embracing a living value proposition requires a willingness to reevaluate even your most precious perceptions.
Adapt for new markets but celebrate your universal value. Your value proposition won’t hold the same appeal across all markets, especially if you go global. Preparing to launch in Croatia, we’ve discovered that full-service management isn’t a draw for vacation homeowners. Our prospective partners there largely prefer to maintain their own homes. In addition to generating more revenue for them through our yield management technology, shipping them hard-to-find items like American shampoo for guests is more appreciated. Once you successfully penetrate several markets, hone your overall value proposition so your brand feels universally relevant. We’re focusing on our revenue guarantee because we’ve found no matter where in the world they operate, vacation rental homeowners value the guarantee that they’ll earn more money.
Maintain best-in-class tools. A variety of tools — technology, employees, partnerships, etc. — enable you to deliver on your value proposition. Develop them. We came close to slowing down with our yield management technology. It was best in class, so we stopped iterating. Other pricing tools were catching up. Having the best tools enables our value proposition, so we allocated budget to enhance our pricing technology with machine learning.
Supreme Court Justice Thurgood Marshall didn’t have value propositions in mind when he introduced the idea of the Constitution as a living document. But you can apply his theory to entrepreneurship just the same. Starting a business is a wild, rewarding ride and nothing — including your value proposition — is set in stone. The risk of not evaluating and adjusting as you grow is that someone will pass you by and you may never become relevant again.
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Cliff Johnson is co-founder and Chief Development Officer of Vacasa, a tech-enabled vacation rental management company.