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Create Value. What does it mean?

Yussef

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I like things simple. I have heard it said time and time again not only on this forum but in just about 90% of anything business related that I pick up. It's the same saying or something similar "Don't focus on the money, create value and the money will come."

I would like value defined by some of you that feel you have created it, and what you feel the evidence of this created value was.

I found a short snippet on e-how about creating value but I am hoping to get something epic here.

Oh by the way I am not challenging this thought. I believe it but would like a deeper understanding so that I can connect to the concept. Thanks in advance.
How to Create Value in Business | eHow.com
 
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Kak

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Think of it this way. If you had 20 dollars and someone said they would sell you a crisp $50 bill for your $20 would you do it? Of course! Now think of a product that you think is easily worth $50, if someone can sell it for $35 they created value to you.

If most people think what you offer is worth the money they pay then you created value.
 

Yussef

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Think of it this way. If you had 20 dollars and someone said they would sell you a crisp $50 bill for your $20 would you do it? Of course! Now think of a product that you think is easily worth $50, if someone can sell it for $35 they created value to you.

If most people think what you offer is worth the money they pay then you created value.

Hmmm. Ok. Thanks for this. Your reply made me realize that value is very subjective, depending upon which industry your in.
 

socaldude

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Bro, the best way to look at it is this: There is no such thing as "making money". Money is simply evidence/proof of your value contribution. Whether you cleaned toilets in public restrooms in downtown Los Angeles or whether you own a company. Whether you are an employee or an entrepreneur you contributed VALUE, except the entrepreneur leverages capital, and therefore can contribute MORE value than an employee. plain and simple. forget this whole non-sense concept of money that most people are totally stuck with.

Value is defined as delivering something that someone else needs to another member in society. An entrepreneur simply molds resources such as human capital and other economic resources such as plastic, wood, metal, computers, software etc. into something that someone else NEEDS. That right there is value.
 
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Kak

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Bro, the best way to look at it is this: There is no such thing as "making money". Money is simply evidence/proof of your value contribution. Whether you cleaned toilets in public restrooms in downtown Los Angeles or whether you own a company. Whether you are an employee or an entrepreneur you contributed VALUE, except the entrepreneur leverages capital, and therefore can contribute MORE value than an employee. plain and simple. forget this whole non-sense concept of money that most people are totally stuck with.

Value is defined as delivering something that someone else needs to another member in society. An entrepreneur simply molds resources such as human capital and other economic resources such as plastic, wood, metal, computers, software etc. into something that someone else NEEDS. That right there is value.

If this is what everyone was looking for, I am sorry for the oversimplified example. Great post buddy! :thumbsup:
 

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I would also say that marketing can create 'manipulated value' , e.g. look at products in the weight loss niche, most of the time its the 'marketing' which is creating the demand not the actual product itself, because its changing customers value perceptions. Could be something like adding a new benefit, or emphasizing a benefit more then others.
 

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Bro, the best way to look at it is this: There is no such thing as "making money". Money is simply evidence/proof of your value contribution. Whether you cleaned toilets in public restrooms in downtown Los Angeles or whether you own a company. Whether you are an employee or an entrepreneur you contributed VALUE, except the entrepreneur leverages capital, and therefore can contribute MORE value than an employee. plain and simple. forget this whole non-sense concept of money that most people are totally stuck with.

Value is defined as delivering something that someone else needs to another member in society. An entrepreneur simply molds resources such as human capital and other economic resources such as plastic, wood, metal, computers, software etc. into something that someone else NEEDS. That right there is value.

This. Historically, money is an IOU for a barter system. Money is proof you provided service to another person, and the more money you have the more value you've provided to others.

To make more money, provide more 'value'. That is: be more useful to more people. Solve their problems, give them something. Doing something like google 'sniping' a niche site for adsense clicks, you provide questionable value, its more like hacking a temporary system to cheat your way into money, which is why a simple algorithm change can screw over your business. If you had a niche site that provided actual value (in depth original articles/advice/tutorials), you'd have a thousand people naturally linking to you, and that traffic would keep you alive no matter what google did.
 
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Rickson9

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A lot of money is also made by arbitrage and scalping where arguably no value is created. I create money this way.
 

healthstatus

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You can substitute the word "value" with "need" or "want", create a need, or create a want and people will pay to get it.
 

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The word value has a challenge within it. Especially for hippies like me. I just think value is whenever somebody will think it will make their lifes better, easier.. etc. So when I sell headphones, I give value. Why? because some people love to listen to music.

Another form of value could be to write an ebook about something you know a lot about. Or a service that gives people an easier way to do things.

It's so broad, for me the only distinction is: Just don't do it for selfish reasons.
But, whatever company you look at that makes big bucks does it by giving value, providing a solution to a problem.

The big problem for me always is to get not hung up with all these terms. "Shit, I need to give value"... It sounds really heavy.

I also got stuck with the sentence "do what you love won't make you rich". All it says is that you won't become rich with some weird activity nobody cares about. If you love coding, i would not say it can't make you rich.
 
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Yussef

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So it seems that money, in most cases is evidence of value. What about power, influence, and branding? Are these things also a product of value?

I am beginning to believe that convenience is a form of value relative to saving people time. One example I can think of is McDonald's. Obviously they do not serve the best tasting or most nutritious food in the entire restaurant industry but they provide a quick solution to a problem that all humans experience. Hunger.

So is it safe to say that if I don't have the greatest product online I can offer quicker more convenient shipping (possibly even cheaper) and still create value via convenience? I am not trying to be too deep but if I can clearly define as many ways to create value and apply a few of them that should really compound the results.
 

Skys

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The biggest companies didn't get there without ever being small. Atleast, with the little knowledge I have I don't know a company that right away where the biggest. So they have given lots of value and because of that are now very powerful in their industry. Look at Virgin, how much fun they brought in the lifes of people. Now, they are one of the biggest companies and they can use their money to build more companies. But, those companies will fail, I think, if they don't bring value to the people.

Again, I am not that knowledgeable. I also don't care to be. One thing I have learned last year is to stop looking at the big guys feeling shitty about my own progress.
Lets say you love playing music, you love to paint, you love public speaking and with that,.. you also are trying to build your company. If you look at Clapton, Picasso, Bill Clinton and Richard Branson to see how you are doing, you will always feel overwhelmed. But yes, MAC Donalds doesn't have the best burger, they bring value on a different level.

I think you are a bit like me.. Too much thinking. There is no map to build a succesful company. There are guidelines. One of those guidelines is that your company need to bring something to the people that will solve 'something'. Doesn't matter if that's noise canceling headphones for the people that travel and hate all the city sounds, or building a company that flys you from country A to Z.

Something I learned from Eckhart tolle: Words are just Words. So..even a word like 'company' got me stuck for some time.
 

The-J

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The word value has a challenge within it. Especially for hippies like me. I just think value is whenever somebody will think it will make their lifes better, easier.. etc. So when I sell headphones, I give value. Why? because some people love to listen to music.

Another form of value could be to write an ebook about something you know a lot about. Or a service that gives people an easier way to do things.

It's so broad, for me the only distinction is: Just don't do it for selfish reasons.
But, whatever company you look at that makes big bucks does it by giving value, providing a solution to a problem.

The big problem for me always is to get not hung up with all these terms. "Shit, I need to give value"... It sounds really heavy.

I also got stuck with the sentence "do what you love won't make you rich". All it says is that you won't become rich with some weird activity nobody cares about. If you love coding, i would not say it can't make you rich.

Your whys dont matter. As long as the customer gets what he wants. You can make your whys matter to the customer, and that is a form of marketing.
 
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Milkanic

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So is it safe to say that if I don't have the greatest product online I can offer quicker more convenient shipping (possibly even cheaper) and still create value via convenience? I am not trying to be too deep but if I can clearly define as many ways to create value and apply a few of them that should really compound the results.

Yes, look at Gap, INC. They own Gap, Old Navy, and Banana Republic. Each store basically offers the same things (pants, shirts) but the value is completely different.

Check out the book "Personal MBA", the first couple chapters are dedicated to this concept and how various businesses offer value.
 

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I'm not a professional marketer, and I didn't stay at a Holiday Inn Express last night, but I do have some opinions on this.

Value means different things to different people, and it can be subtle. Good marketing can add a lot to value. Consider a simplistic example - Advertisements for a watch:

Craigslist Ad 1: For sale - men's watch. Works. $50

Craigslist Ad 2: For sale - men's G-shock watch in excellent condition [photo of watch]. Black with gold trim, no scratches. Automatically sets its own time to the atomic clock signal - no need to ever set the time again! Low, low price of $50.​

The customer knows exactly what he's getting with ad 2. You've given him insight, which is value, and you'll profit by actually selling the thing instead of it sitting forever on your shelf.

There's also perceived value, which you can offer by making the customer comfortable with choosing your product over somebody else's. Again, good marketing can do this for you. Portray your product as the second coming, complete with over the top descriptions, glowing recommendations, happy happy words combined with a no BS approach and you can sway people into buying your product over someone else's.

At least that's the theory I'm going with. :smx9:
 

wade1mil

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What I use to think value was: Create a brand new product nobody has ever heard of and show them why they need it.

What I now think value is: Offer something people want or need. If you sell computers cheaper than everyone else, you've created value by saving them money. If you create a new gizmo that people want, you've created value by giving people something they want. If you sell toilets (or any other product that already exists) and market it under your own brand, you've created value by making it easier for customers to buy what they want. If you install solar panels, you've created value by installing something the buyer wouldn't know how to install himself. Making something cheaper, better, easier, faster, more professional. MJ writes about this in TMF . Think of value in terms of your customer's perceived perspective rather than in terms of your perspective, that was my biggest problem with understanding value.
 
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Skys

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Making something cheaper, better, easier, faster, more professional. MJ writes about this in TMF . Think of value in terms of your customer's perceived perspective rather than in terms of your perspective, that was my biggest problem with understanding value.

This is so awesome about TMF (fastlane book). Some books have a certain quality to them, that when you read it again you just hear different things that the first time. The reason is obvious: The reader has a deeper understanding of the concepts and now hears different things. MJ's book has this quality. Not many books do.
 

socaldude

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Create a brand new product nobody has ever heard of and show them why they need it.

Pursuing an idea that had already been done might actually be a GOOD thing. Because the concept is proven. You just do it better. If the concept has not been proven, there is a lot of risk. And maybe there is a REASON why it has never been done. Maybe the pros know something you don't, idk?? :smug2:
 

wade1mil

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Pursuing an idea that had already been done might actually be a GOOD thing. Because the concept is proven. You just do it better. If the concept has not been proven, there is a lot of risk. And maybe there is a REASON why it has never been done. Maybe the pros know something you don't, idk??

Right, I use to think you had to reinvent the wheel and that any competition was bad. Literally the opposite is true.
 
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Yussef

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I'm not a professional marketer, and I didn't stay at a Holiday Inn Express last night, but I do have some opinions on this.

Value means different things to different people, and it can be subtle. Good marketing can add a lot to value. Consider a simplistic example - Advertisements for a watch:
Craigslist Ad 1: For sale - men's watch. Works. $50

Craigslist Ad 2: For sale - men's G-shock watch in excellent condition [photo of watch]. Black with gold trim, no scratches. Automatically sets its own time to the atomic clock signal - no need to ever set the time again! Low, low price of $50.​

The customer knows exactly what he's getting with ad 2. You've given him insight, which is value, and you'll profit by actually selling the thing instead of it sitting forever on your shelf.

There's also perceived value, which you can offer by making the customer comfortable with choosing your product over somebody else's. Again, good marketing can do this for you. Portray your product as the second coming, complete with over the top descriptions, glowing recommendations, happy happy words combined with a no BS approach and you can sway people into buying your product over someone else's.

At least that's the theory I'm going with. :smx9:

Nice. Simple, yet very insightful.
 

Yussef

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How I applied this today in real time:notworthy:

I own a home healthcare based business and I focused about 3 hours of my time today on developing 3 packages of care ranging from a basic home based healthcare service, to an elite level, 7 day per week package in which I offer (along with the home health services) Therapeutic Massage from a contracted partner and concierge services for busy professional family members (also available through a contracted person I know). Although these are both optional in the elite package I wanted to bring something I have not seen my competitors offer. My value contribution for the day. Thanks guys.
 

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Nice! It seems that would be an easy industry to get complacent and stop being innovative. Had you tested the concept with any customers beforehand to gauge the level of interest?

Another service you might offer is dog visits. I've heard good things about bringing dogs into rest homes to visit interested patients. Very therapeutic. I love dogs, so someone damn well better bring one around to visit me when I'm creaky and ancient!
 
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Yussef

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Nice! It seems that would be an easy industry to get complacent and stop being innovative. Had you tested the concept with any customers beforehand to gauge the level of interest?

Another service you might offer is dog visits. I've heard good things about bringing dogs into rest homes to visit interested patients. Very therapeutic. I love dogs, so someone damn well better bring one around to visit me when I'm creaky and ancient!

LOL your crazy dude
 

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I really like the dog idea. I also think some sort of mental health counseling would be helpful. Depression is a serious problem for older folks.
Have you thought about expanding beyond healthcare? What about other senior services (house calls for minor desktop computer teaching/repair so they can keep in touch with their kids, housecleaning services through another vender, etc.)?
 
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Yussef

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I really like the dog. I also think some sort of mental health counseling would be helpful. Depression is a serious problem for older folks.
Have you thought about expanding beyond healthcare? What about other senior services (house calls for minor desktop computer teaching/repair so they can keep in touch with their kids, housecleaning services througidaloteah another vender, etc.)?

I am opened to new innovative ideas to separate us from our competitors, but just establishing a name for ourselves among the financially elite by itself is a full time job at the moment. Maybe when we start gaining momentum via word of mouth we can introduce new ideas to keep an edge in the market around that time.
 

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"I know of nothing more despicable and pathetic than a man who devotes all the hours of the waking day to the making of money for money's sake."-John D. Rockefeller

"Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer."-Adam Smith

Even these two Bros were Fastlane =)
 
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""Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfactions, our ego satisfactions, in consumption. The measure of social status, of social acceptance, of prestige, is now to be found in our consumptive patterns. The very meaning and significance of our lives today expressed in consumptive terms. The greater the pressures upon the individual to conform to safe and accepted social standards, the more does he tend to express his aspirations and his individuality in terms of what he wears, drives, eats- his home, his car, his pattern of food serving, his hobbies."
 

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"Don't focus on the money, create value and the money will come."

Exactly. It's redefining how money is acquired. To create a velocity of money flow into your direction, you have to HAVE what money is attracted to, and that is VALUE. Value is defined by NEED, DEMAND, or WANT.

Think of value/money relationship like a magnet: Value is the positive charge, money is the negative charge. Put the two charges (negative and positive) together and create attraction. The magnet moves and creates a bond.

Unfortunately, it the world of "money making" -- people approach money on a polarized basis; they attack money with a negative charge (I wanna make money! I wanna get rich!) and you know what happens when you inverse a magnet? You repel the two forces. Two identically charged magnets face to face will repel each other. This simple analogy (positive charge/negative charge) is why most people never make money. To attract money, you must reverse your polarity from negative (repel) to positive (attract).

(This shit is probably going into my next book if I have one... consider it a preview =))

Value is defined as delivering something that someone else needs to another member in society.

Bingo.

the more money you have the more value you've provided to others.

True. This is why anyone who begrudges "rich people" they are actually begrudging value creators and job creators. Class warfare is nothing but an attack on the very people who create value in our world. I'd don't mind a billionaire moving into my town if he provides 1,000 great jobs, or spends millions at the local stores. I love rich people because they advance our society via a value exchange. Rich people typically both produce and consume heavily - both are fundamental to a robust economy. You don't get jobs from poor people.

To make more money, provide more 'value'. That is: be more useful to more people. Solve their problems, give them something. Doing something like google 'sniping' a niche site for adsense clicks, you provide questionable value, its more like hacking a temporary system to cheat your way into money, which is why a simple algorithm change can screw over your business.

This is why I'm not big on AM as a primary revenue driver, but a complement. For example, the affiliate ads at this forum are complementary- they aren't my bread-n-butter. It's the salt on the steak.

A lot of money is also made by arbitrage and scalping where arguably no value is created. I create money this way.

Au contraire.

If you buy a house in Phoenix, you bought it because you felt the market UNDERVALUED it. YOU saw value. When you buy a stock, you feel it is UNDERVALUED via its stock price versus its management and earnings potential. You are speculating on your ability to be a better determinant of value, and your ability to forecast value into the future.

When I buy stock options, I am making a value bet. I bet that the price will be valued higher or lower in the future.

If I sell naked RIMM calls, I'm saying "These call options are overpriced and worth selling: this company is valued too high - the price will be lower in the future"

Every action, or non-action is a value assessment.

When you purchase an undervalued house, fix it up, and rent it for $1000/mo, you are "creating" value. Your business is also high in the business of "assessing" value.

If you love coding, i would not say it can't make you rich.

It will make you rich if you translate it into value that others can consume.

MJ writes about this in TMF . Think of value in terms of your customer's perceived perspective rather than in terms of your perspective, that was my biggest problem with understanding value.

Any time you hear someone saying "money" -- replace the word with "value" -- that helps.

Similarly, anytime I hear a politician say "we must tax the rich" -- I replace "the rich" with "the value creators".

The big problem for me always is to get not hung up with all these terms. "Shit, I need to give value"... It sounds really heavy.

Sometimes value can be reframed just by presentation. This is the art of assessing value. (Like in finding undervalued stocks, real estate, etc.)

Buy something at Craiglist with one blurry picture. Take it home, clean it up, paint it, do whatever; take 10 High-Def photos and relist for more. You just reframed value.
 

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