The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Live your best life.

Tired of paying for dead communities hosted by absent gurus who don't have time for you?

Imagine having a multi-millionaire mentor by your side EVERY. SINGLE. DAY. Since 2007, MJ DeMarco has been a cornerstone of Fastlane, actively contributing on over 99% of days—99.92% to be exact! With more than 38,000 game-changing posts, he's dedicated to helping entrepreneurs achieve their freedom. Join a thriving community of over 90,000 members and access a vast library of over 1,000,000 posts from entrepreneurs around the globe.

Registration at the forum removes this block.

What Does "Value Skew" Mean?

Blaise84

Bronze Contributor
LEGACY MEMBER
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
155%
Jul 8, 2017
150
232
39
Northeast Ohio
As you understand it, what does the term "value skew" mean when applied to business and product/service production?

As I search Google, what I'm finding are concepts related to data analytics. Based on this, I'm assuming the term refers to something in the lines of taking an existing system or product, and focusing on one or two specific aspects of that product in a new way. For example, Nike and Brooks both focus on athletic shoes, but Nike skews value toward the area of style, while Brooks skews value toward the area of function. Am I on the right track?
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

The-J

Dog Dad
FASTLANE INSIDER
EPIC CONTRIBUTOR
LEGACY MEMBER
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
267%
Aug 28, 2011
4,295
11,483
Ontario
Precisely, although choosing the value attributes that you 'skew' will depend on your market.

It's explained in better detail in the book.

In the purchase decision making process, we all (either consciously or unconsciously) have different factors that influence our purchase of a given product.

These factors are different for everything we purchase.

Take the example of taxis vs. Uber (or similar service).

What influences our decision to choose a 'get me from point A to point B' service? Well, lots of things. Price, speed, availability, riding experience, ease of getting the taxi, etc. You get the idea.

Getting a taxi sucks. You don't know the price, you don't know the speed, availability can be low (on their schedule), the riding experience sucks, you have to hail the damn thing and pray there's no one already in there... it's all around terrible. At the end, you still somehow pay more than you planned on paying even though you didn't know the cost in the first place. F*cking terrible experience all around!

Uber is different. You know what you're paying, you know exactly when it's gonna get there, availability is guaranteed within a timeframe, it's super easy to get one. The experience can vary from excellent to 'I'm gonna get murdered', though; but you can check ratings on a particular driver to determine with some reason whether or not that's the case.

Uber wins hands down, even though the company is terrible and they tend to operate on the line of legality.

---

To apply this to your business, you gotta first know (1) why people choose the product that you sell and (2) what attribute your product can/does skew. Let's say you wanna start a soap business. Soap is cheap (you can get it for a dollar) but there's lots of soap out there that sells for way the F*ck more. Why?

Well, people choose based on smell, on ingredients, on source of ingredients, handmade vs. factory made, what the soap looks like in the dish and plenty more. If you're demonstrably superior on one of these, you can sell soap for much more than a dollar.

Then there comes the competitive aspect of value skews. I explained the taxi/Uber thing, but it's not a great comparison in the real world because an Uber/taxi situation is quite rare and completely disruptive for an industry. In the real world, you have products and services that have hundreds of competitors, all with different value attribute skews.

Price is the most basic value skew there is. If you're the cheapest, you WILL get a segment of the market no matter what. For that to be the case, you need to win on the supply chain side. (Microecon 201). There are people who will always, and only, buy the $1 soap. I'm one of those people (except in the case of a gift).

With the hundreds of soap companies out there, where would my soap fit in? Well, maybe I could make the soap that smells the best + demonstrate that it's the case. Or, maybe my soap comes in the prettiest packaging and it can be given as a gift without needing to be wrapped. Maybe my soap is made from a rare ingredient only found in the Zambezi River, made right there by African pygmies (sustainably and without slave labor). Maybe it's infused with pheromones that will make you irresistible to BOTH sexes! Who knows; the possibilities are endless.

But you don't know the possibilities until you can estimate the attributes where value can be skewed. The communication of said skew may or may not justify the price point, and all you can do is try it out.
 

Blaise84

Bronze Contributor
LEGACY MEMBER
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
155%
Jul 8, 2017
150
232
39
Northeast Ohio
Precisely, although choosing the value attributes that you 'skew' will depend on your market.

It's explained in better detail in the book.

In the purchase decision making process, we all (either consciously or unconsciously) have different factors that influence our purchase of a given product.

These factors are different for everything we purchase.

Take the example of taxis vs. Uber (or similar service).

What influences our decision to choose a 'get me from point A to point B' service? Well, lots of things. Price, speed, availability, riding experience, ease of getting the taxi, etc. You get the idea.

Getting a taxi sucks. You don't know the price, you don't know the speed, availability can be low (on their schedule), the riding experience sucks, you have to hail the damn thing and pray there's no one already in there... it's all around terrible. At the end, you still somehow pay more than you planned on paying even though you didn't know the cost in the first place. F*cking terrible experience all around!

Uber is different. You know what you're paying, you know exactly when it's gonna get there, availability is guaranteed within a timeframe, it's super easy to get one. The experience can vary from excellent to 'I'm gonna get murdered', though; but you can check ratings on a particular driver to determine with some reason whether or not that's the case.

Uber wins hands down, even though the company is terrible and they tend to operate on the line of legality.

---

To apply this to your business, you gotta first know (1) why people choose the product that you sell and (2) what attribute your product can/does skew. Let's say you wanna start a soap business. Soap is cheap (you can get it for a dollar) but there's lots of soap out there that sells for way the F*ck more. Why?

Well, people choose based on smell, on ingredients, on source of ingredients, handmade vs. factory made, what the soap looks like in the dish and plenty more. If you're demonstrably superior on one of these, you can sell soap for much more than a dollar.

Then there comes the competitive aspect of value skews. I explained the taxi/Uber thing, but it's not a great comparison in the real world because an Uber/taxi situation is quite rare and completely disruptive for an industry. In the real world, you have products and services that have hundreds of competitors, all with different value attribute skews.

Price is the most basic value skew there is. If you're the cheapest, you WILL get a segment of the market no matter what. For that to be the case, you need to win on the supply chain side. (Microecon 201). There are people who will always, and only, buy the $1 soap. I'm one of those people (except in the case of a gift).

With the hundreds of soap companies out there, where would my soap fit in? Well, maybe I could make the soap that smells the best + demonstrate that it's the case. Or, maybe my soap comes in the prettiest packaging and it can be given as a gift without needing to be wrapped. Maybe my soap is made from a rare ingredient only found in the Zambezi River, made right there by African pygmies (sustainably and without slave labor). Maybe it's infused with pheromones that will make you irresistible to BOTH sexes! Who knows; the possibilities are endless.

But you don't know the possibilities until you can estimate the attributes where value can be skewed. The communication of said skew may or may not justify the price point, and all you can do is try it out.

Great stuff-- thank you! This is a thorough explanation and helps out quite a bit (by the way, when it come to soap, I'll sometimes spring a few extra bucks for 100% natural stuff that also has the quality of smelling good).

So, to me, it seems like a value skew is all about getting into the mindset or "shoes" of individuals or groups who would potentially be interested in a specific product or service, and then making alterations, or "skews," from their viewpoint.

I was reading The E Myth earlier today, and it seems most new entrepreneurs consider what they want to offer the market and how they want to offer it. The book discusses the a$$-backwardness of this approach, saying that the way to develop a business is through considering what the people of the market want. So, when it comes to skewing value of an already existing product or service, it's a matter of asking how to alter it in such a away that would appeal to a portion of the market.
 

Become a Fastlane Member Today to Read More or Comment.

This thread has
13
more posts!

Join MJ DeMarco's Inner Circle and Rub Shoulders with Other Millionaire Entrepreneurs

Imagine a multi-millionaire mentor by your side EVERY. SINGLE. DAY. Since 2007, MJ DeMarco has been the driving force of Fastlane, contributing on over 99% of days—99.92% to be exact! With over 38,000 posts game-changing posts, he's dedicated to helping entrepreneurs achieve freedom. Join 90,000+ members and access a vast library of 1,000,000+ posts from entrepreneurs worldwide.

Fastlane isn’t just another community led by an absent guru. By joining, you enter MJ’s inner circle—a supportive home where you’re never alone. Embrace true mentorship and transform your entrepreneurial journey with the Fastlane Forum.

Basic Membership (Monthly)

  • Read all threads in the main forums/categories.
  • Post comments in existing topics.
  • React to any comment/post.
  • Post new topics/threads.
  • Sort big threads by best posts.
  • Cancel anytime

$5 per month

Join Now

Basic Membership (Yearly)

  • Save 22% vs monthly
  • Read all threads in the main forums/categories.
  • Post comments in existing topics.
  • React to any comment/post.
  • Post new topics/threads.
  • Sort big threads by best posts.
  • 30% Off a Yearly GoalSumo.com Subscription
  • Cancel anytime

$47 per year

Join Now

VIP Insider Membership

  • Same as basic plus...
  • Guaranteed read and response from MJ DeMarco*
  • Access to the private Insider forum for more advanced users.
  • Bookmark any posts
  • No non-sponsor ads
  • 50% Off a Yearly GoalSumo.com Subscription ($34 Value)

$119.88 per year

Join Now

* If you post any question or problem within the INSIDER forum, this guarantees MJ will read and respond to your post to the best of his ability at least one time. This guarantee does not imply a lifetime dialogue or a personal ongoing mentorship. Again, MJ has authored more than 38,000 responses at this forum since 2007.


Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top