Tenet 2: Value Innovation As digital product inventors, we must be hyperaware of all the changing digital market dynamics. We must understand how and why people use their digital devices and what defines a successful and a failed UX. This is because a user’s first contact with the interface generally determines success or failure. It provides the user with their first impression of your value innovation, and it is value innovation that disrupts or creates new mental models for people. We definitely want to do that. Before we dig into value innovation, let’s discuss the word “value.” The word is used everywhere. It’s found in almost all traditional and contemporary business [15] books since the 1970s. In Management: Tasks, Responsibilities, Practices, Peter Drucker discusses how customer values shift over time. He gives an example of how a teenage girl will buy a shoe for its fashion, but when she becomes a working mother, she will probably buy a shoe for its comfort and price. In 1984, Michael Lanning first coined the term “value proposition” to explain how a firm proposes to deliver a valuable customer experience. For a business to generate wealth, it needs to offer a superior product to that of its competitors but at a manufacturing cost below what customers pay for it. That same year, Michael Porter defined the term “value chain” as the chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product. Figure 2-4 illustrates a traditional value chain for a physical product manufacturer. Figure 2-4. The value chain That is the business process that Toyota uses to make vehicles and that Apple uses to make computers and devices. During each of the activities in this value chain of events, opportunities exist for firms to outperform their competitors. But, all those terms apply to physical products. By contrast, virtual products allow for a value chain to have faster repeat loops and in some cases for the activities to happen in parallel. This is part of why traditional business-strategy principles do not perfectly map to digital product strategy. When producing digital products, we must continuously research, redesign, and remarket to keep up with the rapidly evolving online marketplace, customer values, and value chains that are required to keep our products in production.