Creating Value for Entrepreneurs

Creating Value
Mohammad Tawfik
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Creating Value
Mohammad Tawfik

Creating Value
Mohammad Tawfik
#WikiCourses
Reference:
The Personal MBA
By: Josh Kaufman
http://personalmba.com/

Creating Value
Mohammad Tawfik
#WikiCourses
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

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
Roughly defined, a business is a repeatable
process that:

Creating Value
Mohammad Tawfik
#WikiCourses
1. Creates and delivers something of value . . .

Creating Value
Mohammad Tawfik
#WikiCourses
2. That other people want or need . . .

Creating Value
Mohammad Tawfik
#WikiCourses
3. At a price they’re willing to pay . . .

Creating Value
Mohammad Tawfik
#WikiCourses
4. In a way that satisfies the customer’s needs
and expectations . . .

Creating Value
Mohammad Tawfik
#WikiCourses
5. So that the business brings in enough profit to
make it worthwhile for the owners to continue
operation.

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
The FIVE-PARTS of business

Creating Value
Mohammad Tawfik
#WikiCourses
Every business is fundamentally a collection of
five Interdependent processes, each of which
flows into the next:

Creating Value
Mohammad Tawfik
#WikiCourses
1. Value Creation. Discovering what people need
or want, then creating it.

Creating Value
Mohammad Tawfik
#WikiCourses
2. Marketing. Attracting attention and building
demand for what you’ve created.

Creating Value
Mohammad Tawfik
#WikiCourses
3. Sales. Turning prospective customers into
paying customers.

Creating Value
Mohammad Tawfik
#WikiCourses
4. Value Delivery. Giving your customers what
you’ve promised and ensuring that they’re
satisifed.

Creating Value
Mohammad Tawfik
#WikiCourses
5. Finance. Bringing in enough money to keep
going and make your effort worthwhile.

Creating Value
Mohammad Tawfik
#WikiCourses
Don’t go around saying
the world owes you a
living. The world owes you
nothing, it was here first.
—MARK TWAIN,
AMERICAN NOVELIST

Creating Value
Mohammad Tawfik
#WikiCourses
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

Creating Value
Mohammad Tawfik
#WikiCourses
What may drive customers to you?

Creating Value
Mohammad Tawfik
#WikiCourses
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:

Creating Value
Mohammad Tawfik
#WikiCourses
The Drive to Acquire.
The desire to obtain or collect physical objects, as
well as immaterial qualities like status, power, and
inlfuence.

Creating Value
Mohammad Tawfik
#WikiCourses
Businesses built on the drive to acquire include
retailers, investment brokerages, and political
consulting companies.

Creating Value
Mohammad Tawfik
#WikiCourses
Companies that promise to make us wealthy,
famous, influential, or powerful connect to this
drive.

Creating Value
Mohammad Tawfik
#WikiCourses
The Drive to Bond.
The desire to feel valued and loved by forming
relationships with others, either platonic or
romantic.

Creating Value
Mohammad Tawfik
#WikiCourses
Businesses built on the drive to bond include
restaurants, conferences, and dating services.

Creating Value
Mohammad Tawfik
#WikiCourses
Companies that promise to make us attractive,
well liked, or highly regarded connect to this drive.

Creating Value
Mohammad Tawfik
#WikiCourses
The Drive to Learn.
The desire to satisfy our curiosity.

Creating Value
Mohammad Tawfik
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Businesses built on the drive to learn include
academic programs, book publishers, and training
workshops.

Creating Value
Mohammad Tawfik
#WikiCourses
Companies that promise to make us more
knowledgeable or competent connect to this drive.

Creating Value
Mohammad Tawfik
#WikiCourses
The Drive to Defend.
The desire to protect ourselves, our loved ones,
and our property.

Creating Value
Mohammad Tawfik
#WikiCourses
Businesses built on the drive to defend include
home alarm systems, insurance products, martial
arts training, and legal services.

Creating Value
Mohammad Tawfik
#WikiCourses
Companies that promise to keep us safe,
eliminate a problem, or prevent bad things from
happening connect to this drive.

Creating Value
Mohammad Tawfik
#WikiCourses
Twelve Standard
Forms of Value

Creating Value
Mohammad Tawfik
#WikiCourses
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

Creating Value
Mohammad Tawfik
#WikiCourses
1. Product. Create a single tangible item or entity,
then sell and deliver it for more than what it cost to
make.

Creating Value
Mohammad Tawfik
#WikiCourses
2. Service. Provide help or assistance, then
charge a fee for the benefits rendered.

Creating Value
Mohammad Tawfik
#WikiCourses
3. Shared Resource. Create a durable asset that
can be used by many people, then charge for
access.

Creating Value
Mohammad Tawfik
#WikiCourses
4. Subscription. Offer a beneit on an ongoing
basis, and charge a recurring fee.

Creating Value
Mohammad Tawfik
#WikiCourses
5. Resale. Acquire an asset from a wholesaler,
then sell that asset to a retail buyer at a higher
price.

Creating Value
Mohammad Tawfik
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6. Lease. Acquire an asset, then allow another
person to use that asset for a predefined amount
of time in exchange for a fee.

Creating Value
Mohammad Tawfik
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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.

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
10. Option. Ofer the ability to take a predefined
action for a fixed period of time in exchange for a
fee.

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
The Iteration Cycle is a process you can use to
make anything better over time

Creating Value
Mohammad Tawfik
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Iteration has six major
steps
WIGWAM method:

Creating Value
Mohammad Tawfik
#WikiCourses
1. Watch—What’s happening? What’s working
and what’s not?

Creating Value
Mohammad Tawfik
#WikiCourses
2. Ideate—What could you improve? What are
your options?

Creating Value
Mohammad Tawfik
#WikiCourses
3. Guess—Based on what you’ve learned so far,
which of your ideas do you think will make the
biggest impact?

Creating Value
Mohammad Tawfik
#WikiCourses
4. Which?—Decide which change to make.

Creating Value
Mohammad Tawfik
#WikiCourses
5. Act—Actually make the change.

Creating Value
Mohammad Tawfik
#WikiCourses
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?

Creating Value
Mohammad Tawfik
#WikiCourses
Feedback

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
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

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
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.

Creating Value
Mohammad Tawfik
#WikiCourses
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

Creating Value
Mohammad Tawfik
#WikiCourses
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:

Creating Value
Mohammad Tawfik
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1. Eficacy—How well does it work?

Creating Value
Mohammad Tawfik
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2. Speed—How quickly does it work?

Creating Value
Mohammad Tawfik
#WikiCourses
3. Reliability—Can I depend on it to do what I
want?

Creating Value
Mohammad Tawfik
#WikiCourses
4. Ease of Use—How much efort does it require?

Creating Value
Mohammad Tawfik
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5. Flexibility—How many things does it do?

Creating Value
Mohammad Tawfik
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6. Status—How does this afect the way others
perceive me?

Creating Value
Mohammad Tawfik
#WikiCourses
7. Aesthetic Appeal—How attractive or otherwise
aesthetically pleasing is it?

Creating Value
Mohammad Tawfik
#WikiCourses
8. Emotion—How does it make me feel?

Creating Value
Mohammad Tawfik
#WikiCourses
9. Cost—How much do I have to give up to get
this?

Creating Value for Entrepreneurs

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