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The only three sources of business value

Discussion in 'Ideas, Needs, Concept Feedback' started by Late Bloomer, Jul 24, 2018.

  1. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    I see a lot of people struggling with how to think about this. Hopefully these thoughts, while most are not totally original with me, will be summarized and organized here in a way that can kick-start some productive focus, for those who need that help.

    There are only three sources of value you could add through business.

    First, some people do something that others find worth paying for, at a high level.

    Michael Jordan played basketball better than anyone else. Plenty of people like to pay to watch great basketball.

    Michael Jackson made and performed music at a uniquely high level. Plenty of people like to pay for great musical entertainment.

    JK Rowling wrote fantasy novels at a world-class level. Plenty of people like to pay to escape into a great, well-told story.

    If you have a talent like this, you probably know it and don't need a focus group or survey to help you recognize it.

    MJ developed good enough coding chops to build an interactive web site, with a search feature and an email feature.

    Later, he put his exceptional understanding of business into books. His books cover a level of thought and action most people didn't already have. That's why we're here.

    It doesn't have to be something spectacular. There's an only-okay, good-enough grocery store near my home in a small town. They are the best in the world at being closer than any other grocery store to where about 10,000 people live. The store's prices are way above average. But the high prices are worth it, to enough people who'd rather not have to drive half an hour to where there are better stores. My guess is that regular shopping by about 500 families keeps this store in business.

    I got my current book writing contract, by adding a lot of value to my writer friend who hired me for the "super slowlane" gig of transcription. Without any agenda, I shared my thoughts about his new client who wants a book about a technology system. I happen to have grown up around high tech, and have worked in it more than the writer has done. Boom, I was asked to be the co-author. If I didn't have above average aptitude to discuss and write about business and technology, I'd never have been asked.

    Second, some people know something that makes them able to create an offer most people didn't even know they could ask for.

    Henry Ford was fascinated by self-powered vehicles since age 13. When he started selling the Model T in his 40's, he was decades ahead of what most people knew about cars. People knew that cars were a super expensive, unreliable toy of the rich. (Like we'd think today about having your own submarine.) People didn't know they could ask for an affordable, reliable everyday vehicle. Ford said, "If I'd asked my customers what they wanted, they would have said, a faster horse." He sold 16 million cars, at a time the U.S. population went from about 75 million to about 100 million people.

    Steve Wozniak was a Silicon Valley computer engineer, interested in the new chips. He knew it was possible to put a few of the new chips into a circuit board and add some software for a nice little computer. Before the Apple computer, most people had no idea that a computer could be an affordable addition to their personal desk.

    Steve Jobs wasn't a computer engineer. When he saw the demo of the graphic user interface, he was convinced it was so much better than typing commands that everyone would want to use a computer that way. He didn't need to convene a focus group, or to ask a hundred computer users what frustrated them.

    Warren Buffet loved studying corporate finance, to figure out which companies had an exclusive business model and an unusually low stock price.

    The thing you know better, doesn't have to be something world-shaking.

    Before McDonald's came to town, people didn't know they could ask for an inexpensive burger that's totally consistent, served in an always-clean environment.

    Before Wal-Mart came to town, people didn't know they could ask for near rock bottom prices on just about everything you need everyday along with a lot of stuff you want, all at mostly good enough quality.

    Before Taco Bell came to town, peopel didn't know they could ask for suspicious taco meat in twenty different types of dirt cheap fast food with weird made-up names.

    MJ discovered that he could attract lots of customers to an industry, and sell the leads to service-provider companies in that industry.

    MJ planned how to get paid to share his expert knowledge through a book and a forum.

    If you have this kind of inside knowledge into what's possible, you probably already know it.

    The only other possibility is that you do research to find a hole in the market.

    Pick some industry. Maybe you already work in it. Maybe your family and friends are in it, and complain to you about it all the time. Maybe, like Gary Halbert suggests, you pick something where direct mail is often profitable. Learn what people are complaining about and longing for. That's easier today than ever before, with so many specialized forums, groups, industry survey reports you can find for free. Look for something that could be at least a little bit better, in a way that people would pay for. MJ's books give examples of value skews. So does Blue Ocean Strategy, which MJ agreed is a good resource.

    If you aren't figuring out how to recognize your exceptional personal talent, or your exceptional personal knowledge of what's possible, or your exceptional personal knowledge of what people really wish they could buy... you're wasting your time chasing something other than value.
     
  2. Nannan
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    Nannan Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    Good write up. I definitely think it's a combination of problems.

    1. Being inactive. Just do something to help someone. If no one, start with yourself.
    2. The lost art of coming up with a solution from scratch, even though it's really easy to find resources online.
    3. Being scared. Tbh, this is still the bane of my existence. It can be quicksand if not dealt properly.
     
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  3. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    With all three areas I mentioned, there's almost never a need to face an empty blank page without any ideas.

    The talented person will be able to draw on previous experience. Michael Jordan had however many thousands of times he'd dunked before. He didn't need to figure out anew from scratch in each playoff game.

    The uniquely informed person will be able to draw on previous knowledge. Henry Ford had already built a car from scratch before he worked on the Model T.

    The excellent market research will be able to go back to what people said in the focus groups, polls, speeches, trade shows, personal interviews, etc. They have a list of desirable features and benefits, not a totally blank page.

    JK Rowling had a blank page in front of her, but her mind was already full of Harry's adventures for her to write down.

    If we're facing a blank page in business and marketing, with no idea what might go on it, we're probably doing something wrong.
     
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  4. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    After a detour through some other things, I came back and reconnected with the fact that this whole question of value creation is what got me interested in business in the first place. It's also what led me to an interest in marketing consulting in particular.

    Realizing how much I love to study and discuss these points, I'm now refocusing my own business and career interests. I'm going to look in a more focused way, at how I can help others to identify, define, and strategically improve their value creation within their businesses and careers.

    Towards that end, I'm going to increasingly focus my forum activity on freely sharing what I've learned about how this works. This is an area not well covered by the usual range of business gurus. It's mysterious to many people who don't happen to feel that they are creative genuises. It's not often thought of as an area to focus on in marketing consulting, because it takes specialized knowledge.

    I'm fortunate to have been able to have developed that knowledge through some unusual career experiences, that made me fascinated and got me to learn more on my own.

    I'll add some detailed discussions of exactly how to look for these value improvements. I welcome discussion, questions, interactions on these themes. Unless it gets derailed, I'll use this thread as my focus point for presenting what I hope will be some interesting, useful, inspiring tips and examples. I believe I can be a uniquely useful resource in this specialty at the forum, and I feel good about this shift in focus for my participation here.

    I'm still interesting in other aspects of marketing, such as web design and copywriting, but I see now that I want those to be within my own unique context of how to design and communicate great offers.

    I believe this has Fastlane potential because there's a huge Need for better product and service designs that could help businesses grow. There's a barrier to Entry because systematic analysis for innovation is not something many people understand. It's efficient use of my Time, and Scalable because I could get royalty, commission, or equity arrangements to reward my success for contributions made in the past and sold by others. It's within my Control because intellectual property can be patented and copyrighted, and can't be taken away by a change in social media algorithms.

    Hit me up here for discussion on value creation!
     
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  5. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Value tip #1: think about End Times

    Today's essay on value creation will look at The End Times.
    No, this isn't a Biblical warning.

    Steven Covey passed along the wise advice, "Begin with the end in mind."

    When we deal with products and services in today's world, we see that most offers come from providers who accept no responsibility about the ultimate disposal of their products and services. Some companies make things designed to be recyclable, or repairable, or upgradeable. Sometimes, if you purchase a lower priced service, you can apply the money towards a higher priced service.

    But for most of what we buy, the end is not in mind from the beginning.

    The end is that we will pass along or throw away our stuff, or someone else will be stuck with that task once we're gone. Sometimes there's even planned obsolescence to make that day come faster.

    In the early days of the American colonies, one way to get to America was to make yourself an indentured servant. In exchange for passage across the ocean, you would make yourself a temporary slave for seven years. After that time of service, you'd be free in your new land.

    In today's society, most of us would say that kind of offer should be illegal. Just sell a ticket at whatever price in dollars, but a ride across the ocean isn't enough to make someone a servant for years.

    I believe that within a hundred years, society will expect providers of goods and services to be legally acountable to close the loop. If you hand out or ship out stuff, you'll be responsible to receive it back when it's used up or worn out, or to have a recycling or donation plan in place. I believe that what we see today as radically Green legislation will be commonplace for the not yet born grandkids of today's young Fastlaners. I'm not making a moral evaluation of good or bad, I'm saying I think this is where massive trends in society will likely go in the long term.

    In Blue Ocean Strategy, there's a list of the lifecycle stages of any product or service. The final stage is "Disposal." But it could as well be called "Handoff," "Exit Strategy," "Conclusion." For a service, the work is complete and there's nothing more to do. Will there be a reason for the buyer to come back?

    How can you begin with the end in mind, better than your competition? Can you provide assurance, at time of purchase, that there is a reasonable conclusion for your stuff other than that someone will have to clean it out of an inhereted storage unit some day? Can you explain how the end result of the service will become part of the better life for your customer?

    If you can't, chance are nobody else in your industry can, either. How you can innovate around the very last thing that happens with your product or service? If you can make a better answer, you can charge a more profitable price, or serve more people who prefer to buy from the closed-loop provider.
     
    Last edited: Jul 27, 2018
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  6. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    [ duplicate post to delete ]
     
  7. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Thanks. By the way, I should make a point early in the thread that my postings here are 100% original content from me, unless I have a quotation with attribution. The value creation essays are for the benefit of MJ's forum members and may be redistributed by MJ's forum system, but I reserve all rights to republish them anywhere else.
     
  8. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Value tip #2: combining completed features

    Today's little essay on building more value into products and services comes from MIT's Axiomatic Design methodology.

    Your product or service design should be based on a prioritized list of requirements.
    Once you have found a way to meet each requirement, look for a way to physically integrate all the solutions, without in any way impairing or degrading any of the requirements.

    A bicycle provides a great example. There's a need for a place to put your hands. A need for a way a to position your body on the vehicle. A need for a way to turn the front wheel fork to steer. A need to control the brakes. A need to control what gears the chain is using.
    Each of these requirements is met. There are handlebars. There's a pivot where the front fork joins the frame. There are levers to squeeze to apply the brakes. There's the control toggles to position the derailleurs.

    Now for the integration: all of these are positioned together, so your hands use all of them as you ride.
    For a motorcycle, there's also the throttle control.

    Where did you get the list of your requirements?
    Do you even have a written list of exactly what your offer will do for its users?
    How did you prioritize the requirements?
    Are all the requirements met?
    Having met all the requirements, can you bring everything together more conveniently for the user?

    For further inspiration, look at just about any successful product in Apple's history. For the original Apple I computer, Woz took chips, circuit layout, slots, and software, and put them all together into a single integrated circuit board. The same idea continues today. There's not a separate pocket phone, pocket camera, pocket computer, and pocket music player, they're integrated in the iPhone.

    I can also provide a simple example of service integration. At fast food, there are often separate lines for "order here," "pay here," and "pick up here." Then you get to pick your table, if space is available. At a sit-down restaurant, someone shows you to your table you reserved, asks what you want, brings it to you, drops off the bill, picks up your money or card, and returns your receipt and change. Which is worth more money?

    Can you provide better integration than your competitors? Better than usual for your industry? More profitable than it costs you to design and provide?
     
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  9. Get Right
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    Get Right Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    How do you have time to post 9.3 posts of this length every day? I must be doing something wrong.
     
  10. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    My nature and skill set is to be someone who communicates, based on research.

    I'm a fast and prolific writer in general. I started with online forums in the early 90's, before there was the Web or social media. I'm mostly writing about things I've thought about for many years, so I already know at the themes of what I would like to say.

    I liked Andy Black's note, where he mentioned that he leaves the forum on in the background, the way other people might leave on the TV or radio.

    For this business value series, I started my exposure to business improvements and product designs, in a job I had in the mid-90's. But it goes back earlier to being fascinated by computers and some other types of products in the 80's. In the mid 2000's, I had work that involved designing service improvements. In the mid 2010's, I had work that involved improving software.

    All this time I've been very eager to learn all I can about these subjects, whether through work or on my own. I've gathered enough material to write a unique book, but I've not had time to write my own book because of working on someone else's book. I figured I might as well share what I know at the equivalent of a page or two a day.

    I've never suggested that anyone else should write as much as I do... or more... or less. If the amount you write makes the forum valuable for you, that's great.

    My forum activity's throughout the day. Wall clock time for my forum activity, including writing drafts for these essays, averages one to two hours a day. Some of the forum activity is just for fun, or to develop new friendships. Most of it is an enjoyable investment in my future, with higher leverage than anything else available to me during those particular seconds and minutes.
     
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  11. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Value Tip #3: NineWindows

    Today's little essay about value definition is an insight from a study of patentable inventions in the former Soviet Union. I'll have more to say about that study another time.

    Today we'll try out the Nine Windows Method.

    Draw a grid of three rows and three columns, like a tic-tac-toe board. Put your offer in the center. For example, let's suppose your offer is a car. In the center square, put the car.

    The left side column is the Past. What is the Past of the kind of car you offer? Are you offering used cars? Did there used to be different models than there are now? Are people nostalgic for classic cars of this type? What's your buyer's history with cars? What's your own history selling cars? Anything about the past of cars that suggests something else you can offer, or a way to improve this offer?

    The right side column is the Future. What is the Future of the kind of car you offer? What can tell people to expect about such cars in their own Future? What is the buyer's future going to be in relationship to this car? What do you envision as your future dealing with cars?

    The lower row is for Sub-Assemblies, or components of your offer. Let's take fuel injectors, for example. In the bottom center box, put today's fuel injectors. In the past, carburetors were used, rather than injectors. Can you get some useful data about historical gas mileage trends on this vehicle? What will be the future technique for putting fuel into position for internal combustion? Are electric cars the future for every vehicle, making injectors irrelevant?

    The upper row is for Super-Products, or the context for your offer. Let's put the car on the road. In the top middle box, put the road. In the past, perhaps the roads weren't paved, or maybe they were less congested than today. Perhaps it could be a valuable offer to provide historical GPS data about where a fleet car was actually driven. What's the future of the roadway? Professor Doc Brown told Marty and Jennifer, "Roads? Where we're going, we won't need roads!"

    The analysis can actually span more rows. For example, with a car, it's more likely that the first level down will be the Engine (with a different analysis grid for the Transmission); inside the Engine, the Fuel System (with a different analysis of the Cooling System, although they're the same thing in the SR-71 Blackbird); inside the Fuel System, the injectors.

    The same nine windows can be used for a service, not just for a product.

    If you'd like a brief Nine Windows analysis, or another one of these improvement designs methods, for what you offer, feel free to ask here and I'll be happy to include some examples from forum members.
     
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  12. Late Bloomer
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    Late Bloomer Gold Contributor Read Millionaire Fastlane Speedway Pass

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    An important source of business value is a well-rested mind that comes from taking appropriate personal time off. I intend to post 5 of 7 days, 40 of 52 weeks, so that I'll have that personal time. See y'all tomorrow!
     
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  13. smark
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    smark Bronze Contributor Speedway Pass

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    Great thread! And I'm not even halfway through it!

    I find the career/business of a value creation consultant to be capable of being quite profitable and very interesting too. Who knows, you might even have your own consulting firm a few years from now.
     
  14. Fightrepreneur
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    I’ve been reading this thread each morning as my caffiene kicks in... helps get my gears turning and kicks my discipline into action.

    @Late Bloomer you are providing us with amazing value free of charge. IMO this is approaching TMF and Unscripted level material. It’s directly applicable to what I am currently developing. Really looking forward to an update. Also, if you ever write a book, you can count me in as a presale (and I haven’t bought a book in ages thanks to my city’s amazing public library system).
     

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