Below Water Level

When considering any investment, we are considering two main questions:

1. What is the value for the customer?
2. What is the value for the business?

Value for Customer

A problem is the obstacle that stands in the way of reaching a desired end state. A customer understands that there is some value they will acquire upon reaching the end state. Therefore, customers will wish to plug the gap between their current state and the end state.

The path to reach a valuable end state will be fraught with obstacles and problems. It is these problems which get associated to the value. Knowledge of the end state and its value enables a customer to place a value on solving the problem.

So, for a customer, knowing the problem is the origin of value.

Value for Business

A customer understands the value derived by solving the problem. When a customer finds their problem solved, the problem solver can derive value in form of the price to be paid by the customer.

Knowing the problem can help determine how much the customer values the problem. The customer’s perception of value feeds right into how much value the problem solver can take as a portion of the value-to-customer.

So, knowing the problem to be solved is also the origin of value for the business.

Source of Value

Therefore, a problem is the origin of all value, for the customer and for your business. Unless we know what problem we are out to solve, the question of value cannot be answered.