You’ve identified Customer Segments, and gotten “out of the building” to find out what they are looking for. I use the plural “segmentS” because you can serve more than one. However, each different segment requires a different approach, including a different value proposition.
Value Proposition is another box in the Business Model Canvas. Here is a short video to describe it:
[Note: the same people who brought you the Business Model Generation book have provided a sequel devoted solely to Value Proposition Design, cleverly entitled Value Proposition Design: How to Create Products and Services Customers Want. Of course, there are also a bazillion other books on this topic, as well as many, many YouTube videos.]
It’s at this point that I suspect theater artists are starting to get their hackles up. “What about me?,” they demand. “Isn’t this about my artistic vision???” Yes, of course. OF COURSE. You are not a theatrical vending machine. If you were, you could just stay in the traditional theater system. You wouldn’t be taking on the risk of creating your own company just to be a hack. “Meet the new boss, same as the old boss.”
This is why your choice of Customer Segment–your “1,000 True fans“–is so important. Paraphasing the subtitle to the Value Proposition Design book, you want the type of art you want to create to be what your chosen customers want. You want there to be a fit between you and your audience.
In business, one Value Proposition can be to be cheaper than the competition. Example: you live in Minneapolis, home of the 900-lb theatrical gorilla of the Guthrie Theatre. You want to do the same mix of mostly classic plays that the Guthrie does. Why would a spectator choose you? Well, you might compete by having considerably lower ticket prices. Your (probably unspoken) Value Proposition would be “We do the same plays for less.” Hey, don’t laugh: this is the approach taken by a lot of theaters! They might throw in another element to establish differentiation: “We do the same plays for less in a more intimate space.” Community theaters do a version of this and throw in “risk reduction” as part of the value: “We do the Broadway musicals and comedies that you already know you love for less.” And they make it financially sustainable by not paying their actors.
The key to creating a strong Value Proposition is understanding the Customer (Segment) Profile, which breaks the customer down into its jobs, pains, and gains. We’ll look at that next,