How to Create Value

How to Create Value

What is value?

According to The Oxford Dictionary, it's: "The regard that something is held to deserve; the importance, worth, or usefulness of something."

If we translate that to its application in the real world, it goes a little something like this:

To create value, you can:

  • Do things people don't do. (non-specific, $)
  • Do things people won't do. (specific, $$)
  • Do things people can't do. (ultra-specific, $$$$)
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For example:

  • Mow lawns. ($, easy)
  • Run a lawn mowing service. ($$, difficult)
  • Build a home maintenance service marketplace. ($$$$, very difficult)

"You get paid in direct proportion to the difficulty of problems you solve." — Elon Musk

Four ways to think about how value is perceived:

Psychological (make someone feel better)

"Maybe you'll play basketball a bit more like MJ if you buy these shoes with his silhouette on them."

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Monetary (make someone more money)

"Give me $100, I'll make some smart investments and give you back $108 next year."

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Functional (make someone more competent)

"Pay me a fraction of what it cost me to learn x, and I'll teach you how to do it."

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Social (make someone fit in better)

"Join this group of your peers to develop your network and find new opportunities."

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All bridges that need building.

For the rest of the playbook on value creation

Leverage is as much about where you are standing as how much force you are applying.

If you are building something, it is far more useful to focus on the work you are doing to produce the result than the result itself.

The constraint we apply to package our idea determines their reach & resonance. "Make 1 decision to eliminate 1,000 decisions."

Labor is generally a more interchangeable resource than vision.

To help understand this idea, consider the contrast between the two concepts ancient Greeks used to think about time.

It should be relatively simple to identify when we aren't accumulating net new experience, but in practice, it doesn't seem to be.

Language is an incredible tool. It makes it possible for us to externalize what we think and communicate it to others.