NABC Model: A Systematic Process To Develop A Business Value Proposition

The world had become a global village long ago, but today it has come to be viewed as a global marketplace. 

Geography is no more considered a limitation to business and one can start a business from anywhere and sell all over the world. This has enabled many people, both young and old, to give wings to their latent ideas for business. However, not every idea that sprouts from your mind can turn into a feasible business proposition. 

What and how then can one do to become the wind beneath the wings? 

Well, the right approach is to follow the NABC model which has become the gold standard when it comes to developing new business ideas that can go on to turn successful. It was developed by the Stanford Research Institute as a tool for development, assessment and presentation of ideas that can win investment or funding. But even before that, one needs to tick certain boxes to reach the level where you are able to pitch your idea before an investor or two. Herein lies the challenge, for few can muster the courage to spell out an idea, fewer still make the preparation to explain it to others convincingly and a handful can pitch with conviction before someone who can willingly put their money behind it. 

Heard of the elevator pitch, haven’t you? To convince someone as you ride an elevator with them is no mean feat. One must have clarity of thought, excellent communication skills and also conviction in one’s idea to manage that. This is where NABC model can help you. 

How does NABC help? 

Pursuing a systematic process in thinking always helps in logical outcomes. 

NABC enables one to thoroughly understand the value proposition. In a way, it helps you to preempt and prepare for any questions that may come your way, thereby clarifying your own path ahead. 

As you prepare through the 4 level model of Need, Approach, Benefit and Cost, you understand where you’re headed with what you’re doing. 

This is best explained through an example. 

Let’s take an example of a woman, Martha from Indonesia who wants to start her own laundry business by using the online platform. Martha lives in a town with a population of a 100,000 people and has some spare space in her apartment from where she plans to begin her laundry. 

Let’s apply the NABC model to Martha’s idea along with some do’s and don’ts. 

N: Stands for NEED

The idea that you’re harboring must have a need among the customers/ clients, otherwise it is just flight of fancy. If there are no takers, your efforts would be futile, not to mention about the money lost. 

In Martha’s case, she has to ensure that her idea of launching a laundry service through online booking must have an unmet or latent need. 

In Martha’s case, she had backed up her plan with a comprehensive study of the city’s laundry services and realized that professionals were looking for reliable laundry service where they can book a pickup and the company arranges to pick and drop clothes for them within a shortest time. 

She also found that the other two companies that worked in this space had online booking but did not have a pick and drop service. 

What not to say during the pitch: The market is huge and expanding. There’s scope for more players here. 

What to say instead: This market segment is currently at $100,000 per year and is growing at 25% p.a.


A: Stands for Approach 

Approach makes all the difference. 

One may toy with an idea that is not disruptive or innovative but still manage to grab a market share, even in a crowded market. 

  • How would one be different from the others? 
  • Can you be Cheaper-Better and Faster than competition? 
  • What are your core strengths and how would you leverage them for the benefit of customers so that you can solve their clear and present need? 
  • Do you have a strategy to optimize your assets and manpower and begin monetizing? 

If yes, you have come halfway through. 

Having said that, Martha cannot just launch her company and begin expecting clients to book. 

Martha’s approach was that of providing comprehensive laundry services where all the customer had to do was select the number and type of garments, schedule a pick up and pay the bill. This worked well for customers who didn’t have to drive down to the launderette for their clothes. Martha was ready to invest in a few high performance machines and a few helping staff who could handle the actual work. She had also planned for 4 delivery persons with two wheelers who could move around town and collect the garments. She also realized she needed two admin staff who would take and track orders online round the clock. This would mean that her expenses would entail people, machines, and computers and spend another sum on the software. She had planned to publicize the service through online ads only.

What not to say during the pitch: We have a unique idea for executing. We will be better than the competition

What to say instead: We will have a one click method for scheduling pick up and payment, that will replace the multiple clicks being done by competitors. 


B: Stands for Benefit

A business has at its core, the idea to solve a problem or a need for the customers and consumers. 

How does your product or service achieve that? 

To understand this, one must have a clear understanding of how customers think and act. 

Step into their shoes and look at your idea. 

  • Does it solve a problem for them? 
  • Does it provide a unique solution to them? 
  • Does it enhance their standard of living because of you? 
  • Do they connect with the product or service emotionally as well? 

If yes, you’re set for success. 

Martha had to speak to a large number of people to gain insights into what they expected from a laundry service that would solve their need and delight them. She realized customers were willing to pay for a service where they had minimal interaction and got their work done. 

What not to say during the pitch: The Return on Investment will be positive from the beginning and it will steadily increase as the days get along.

What to say instead: We estimate an RoI of 20% YoY and look at making profits of $50,000 by the end of year 3.


C stands for Competition

As in sports, knowing your competition well helps greatly in business too. 

  • Study your competition, analyze their Strengths and Weaknesses. 
  • Understand their business plan and poke your nose around to gain feedback about them. 
  • How do they advertise? 
  • Do they engage with their customers online and offline and how? 
  • What is their potential as disrupters in the near future? 
  • What value added features do they have and can you better them at everything that they do?

Only then can you carve a slice out of the market pie. 

If you are entering into unchartered territory, that makes matters easy for the time being but gets murkier once someone decides to compete with you using your germ of an idea. 

In Martha’s case, her small town already had two competitors with whom she had to compete for the market share. Her uniqueness could have been in garnering fresh customers who had never thought that laundry could be picked and dropped. She had to create a need in the minds of potential customers by being different than competition. Her forte could also be on time every time service which today’s professionals demand and appreciate. 

What not to say during the pitch: We are far better than our competition. They’re nowhere near what we are offering

What to say instead: Our competitors are ABC Cleaning (made up name for this article) and 123 Launderers (made up name for this article) and they use a multiple step method, while we have customized an app for one-click method. 

As you can see, by following the NABC model, we treaded the path with Martha and saw how a new business idea can be led to fruition with proper thought and logical path. 

On the way, we thought about the several aspects that could impact the success of the business and worked ahead to find the right answers. 

When such thorough planning gets blended with confident approach and careful hiring, the chances of succeeding automatically increase. 

Making a pitch can be stressful sometimes but using such models can help us in simplifying the whole process, making it enjoyable and yet retaining the essence of being thorough professionals. Remember, investors make their decisions based on the idea, the people behind the idea and the most important things- the conviction of those who would execute this idea. 

Why else would they invest in your idea if you’re not clear yourself? In a way, you foolproof your business from the very beginning by this model.  Here, we ensure that every minute and every penny invested leads to positive return on investment. 

If this business model is not the right one for you, you could check out another famous and commonly used model called as Porter’s Five Forces

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