Creating Value for Entrepreneurs
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Creating Value for Entrepreneurs

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What is value? ...

What is value?
What are the forms of value creation?
How does the customer see it?

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  • 1. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Creating Value Mohammad Tawfik
  • 2. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Reference: The Personal MBA By: Josh Kaufman http://personalmba.com/
  • 3. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Make something people want . . . There’s nothing more valuable than an unmet need that is just becoming fixable. If you find something broken that you can fix for a lot of people, you’ve found a gold mine. PAUL GRAHAM, FOUNDER OF Y COMBINATOR, VENTURE CAPITALIST, AND ESSAYIST AT PAULGRAHAM.COM
  • 4. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com The value you create can take on one of several diferent forms, but the purpose is always the same: to make someone else’s life a little bit better.
  • 5. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Roughly defined, a business is a repeatable process that:
  • 6. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 1. Creates and delivers something of value . . .
  • 7. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 2. That other people want or need . . .
  • 8. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 3. At a price they’re willing to pay . . .
  • 9. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 4. In a way that satisfies the customer’s needs and expectations . . .
  • 10. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 5. So that the business brings in enough profit to make it worth­while for the owners to continue operation.
  • 11. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com A venture that doesn’t create value for others is a hobby. A venture that doesn’t attract attention is a flop. A venture that doesn’t sell the value it creates is a nonproit. A venture that doesn’t deliver what it promises is a scam. A venture that doesn’t bring in enough money to keep operating will inevitably close.
  • 12. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com The FIVE-PARTS of business
  • 13. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Every business is fundamentally a collection of five Interdependent processes, each of which flows into the next:
  • 14. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 1. Value Creation. Discovering what people need or want, then creating it.
  • 15. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 2. Marketing. Attracting attention and building demand for what you’ve created.
  • 16. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 3. Sales. Turning prospective customers into paying customers.
  • 17. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 4. Value Delivery. Giving your customers what you’ve promised and ensuring that they’re satisifed.
  • 18. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 5. Finance. Bringing in enough money to keep going and make your effort worthwhile.
  • 19. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Don’t go around saying the world owes you a living. The world owes you nothing, it was here first. —MARK TWAIN, AMERICAN NOVELIST
  • 20. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Market matters most; neither a stellar team nor fantastic product will redeem a bad market. Markets that don’t exist don’t care how smart you are. MARC ANDREESSEN, VENTURE CAPITALIST AND FOUNDER OF NETSCAPE AND NING.COM
  • 21. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com What may drive customers to you?
  • 22. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com According to Harvard Business School professors Paul Lawrence and Nitin Nohria, the authors of "Driven: How Human Nature Shapes Our Choices", all human beings have four Core Human Drives that have a profound inlfuence on our decisions and actions:
  • 23. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com The Drive to Acquire. The desire to obtain or collect physical objects, as well as immaterial qualities like status, power, and inlfuence.
  • 24. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Businesses built on the drive to acquire include retailers, investment brokerages, and political consulting companies.
  • 25. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Companies that promise to make us wealthy, famous, influential, or powerful connect to this drive.
  • 26. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com The Drive to Bond. The desire to feel valued and loved by forming relationships with others, either platonic or romantic.
  • 27. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Businesses built on the drive to bond include restaurants, conferences, and dating services.
  • 28. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Companies that promise to make us attractive, well liked, or highly regarded connect to this drive.
  • 29. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com The Drive to Learn. The desire to satisfy our curiosity.
  • 30. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Businesses built on the drive to learn include academic programs, book publishers, and training workshops.
  • 31. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Companies that promise to make us more knowledgeable or competent connect to this drive.
  • 32. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com The Drive to Defend. The desire to protect ourselves, our loved ones, and our property.
  • 33. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Businesses built on the drive to defend include home alarm systems, insurance products, martial arts training, and legal services.
  • 34. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Companies that promise to keep us safe, eliminate a problem, or prevent bad things from happening connect to this drive.
  • 35. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Twelve Standard Forms of Value
  • 36. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Value is not intrinsic; it is not in things. It is within us; it is the way in which man reacts to the conditions of his environment. —LUDWIG VON MISES, AUSTRIAN ECONOMIST
  • 37. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 1. Product. Create a single tangible item or entity, then sell and deliver it for more than what it cost to make.
  • 38. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 2. Service. Provide help or assistance, then charge a fee for the benefits rendered.
  • 39. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 3. Shared Resource. Create a durable asset that can be used by many people, then charge for access.
  • 40. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 4. Subscription. Offer a beneit on an ongoing basis, and charge a recurring fee.
  • 41. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 5. Resale. Acquire an asset from a wholesaler, then sell that asset to a retail buyer at a higher price.
  • 42. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 6. Lease. Acquire an asset, then allow another person to use that asset for a predefined amount of time in exchange for a fee.
  • 43. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 7. Agency. Market and sell an asset or service you don’t own on behalf of a third party, then collect a percentage of the transaction price as a fee.
  • 44. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 8. Audience Aggregation. Get the attention of a group of people with certain characteristics, then sell access in the form of advertising to another business looking to reach that audience.
  • 45. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 9. Loan. Lend a certain amount of money, then collect payments over a predefined period of time equal to the original loan plus a predeined interest rate.
  • 46. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 10. Option. Ofer the ability to take a predefined action for a fixed period of time in exchange for a fee.
  • 47. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 11. Insurance. Take on the risk of some specific bad thing happening to the policy holder in exchange for a predefined series of payments, then pay out claims only when the bad thing actually happens.
  • 48. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 12. Capital. Purchase an ownership stake in a business, then collect a corresponding portion of the profit as a one-time payout or ongoing dividend.
  • 49. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com The Iteration Cycle is a process you can use to make anything better over time
  • 50. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Iteration has six major steps WIGWAM method:
  • 51. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 1. Watch—What’s happening? What’s working and what’s not?
  • 52. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 2. Ideate—What could you improve? What are your options?
  • 53. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 3. Guess—Based on what you’ve learned so far, which of your ideas do you think will make the biggest impact?
  • 54. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 4. Which?—Decide which change to make.
  • 55. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 5. Act—Actually make the change.
  • 56. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 6. Measure—What happened? Was the change positive or negative? Should you keep the change, or go back to how things were before this iteration?
  • 57. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Feedback
  • 58. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 1. Get Feedback from real potential customers instead of friends and family. Your inner circle typically wants you to succeed and wants to maintain a good relationship with you, so it’s likely that they’ll unintentionally sugarcoat their Feedback. For best results, be sure to get plenty of Feedback from people who aren’t personally invested in you or your project.
  • 59. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 2. Ask open-ended questions. When collecting Feedback, you should be listening more than you talk. Have a few open- ended questions prepared to give the conversation a bit of structure, but otherwise encourage the other person to do most of the talking. Short who/what/when/where/why/how questions typically work best. Watch what they do, and compare their actions with what they say
  • 60. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 3. Steady yourself, and keep calm. Asking for genuine Feedback (the only useful kind) requires thick skin—no one likes hearing their baby is ugly. Try not to get ofended or defensive if someone doesn’t like what you’ve created; they’re doing you a great service.
  • 61. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 4. Take what you hear with a grain of salt. Even the most discouraging Feedback contains crucial pieces of information that can help you make your offering better. The worst response you can get when asking for Feedback isn’t emphatic dislike: it’s total apathy. If no one seems to care about what you’ve created, you don’t have a viable business idea.
  • 62. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 5. Give potential customers the opportunity to preorder. One of the most important pieces of Feedback you can receive during the iteration process is the other person’s willingness to actually purchase what you’re creating. It’s one thing for a person to say that they’d purchase something and quite another for them to be willing to pull out their wallet or credit card and place a real order. You can do this even if the ofer isn’t ready yet—a tactic called Shadow Testing
  • 63. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com Assuming the promised beneits of the ofering are appealing, there are nine common Economic Values that people typically consider when evaluating a potential purchase. They are:
  • 64. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 1. Eficacy—How well does it work?
  • 65. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 2. Speed—How quickly does it work?
  • 66. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 3. Reliability—Can I depend on it to do what I want?
  • 67. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 4. Ease of Use—How much efort does it require?
  • 68. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 5. Flexibility—How many things does it do?
  • 69. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 6. Status—How does this afect the way others perceive me?
  • 70. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 7. Aesthetic Appeal—How attractive or otherwise aesthetically pleasing is it?
  • 71. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 8. Emotion—How does it make me feel?
  • 72. Creating Value Mohammad Tawfik #WikiCourses http://WikiCourses.WikiSpaces.com 9. Cost—How much do I have to give up to get this?