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

Learning is like climbing an infinite ladder.

We're conditioned to think of a single percentage point as an almost non-consequential gain. In conventional wisdom investing, 1% would be laughed at.

How long it takes to learn something is a better proxy for how valuable something is than how long it takes to do something.

It's comforting to think that hitting a certain target or achieving a definable milestone will bring us lasting comfort.

If you make $10,000 or $1,000,000 and spend 100% of it, the outcome is the same.

An abundance of connectivity means you’re only ever a second away from another opinion.

Expecting to excel in anything without consistent practice is the easiest way to lose.