4 Keys to Value
Creation
1,2,3… 4! Education, Innovation,
Entrepreneurship and Venture Capitalism… 4 Keys to unlock the power of value
creation. The focus should be customer driven, by accomplishing differentiation
from other products, services, but also people! Remember that, as an
entrepreneur, you are a Brand yourself. Your name must inspire trust, and you
must position yourself as a person everyone wants to do business with.
Customers must as well perceive the value you add, and understand the gain they
get by hiring you and nobody else. The Cost for customers are perceived as “loss”
for them and the value they award to it is strongly related to what they lose
and how valuable that is to them. Costs and benefits are not only expressed in
terms of money, but also in time, attention, reputation, privacy, status,
comfort, ease of mind, excitement, entertainment, effort, etc. Customer value
increases when either benefits increase and/or costs decrease. The essence of
value creating is trading something that is low cost to you for something that
is of high value to your customer. Consider cultural differences mentioned
before: Lutheran business values will focus on increasing the output, while
catholic business cultures will try to drive down cost. As mentioned before, to
maximize value increase the output, but also minimize the cost. Both are
equally important to maximize profit.
In my releases “Revolution 4.0
and the Man of Tomorrow – Parts 1 & 2”, I explained how automation and
outsourcing are already destroying a large part of jobs in the private sector
in developed countries. The tendency is that the low-end jobs will be sent to low
income economies, while high income economies focus on high-end, value added
positions. Only through creativity will the new jobs be created. In my release “Where
No Man Has Gone Before – the Road to the Fourth Industrial Revolution”, I show
you the NeXT industries. Since they are not as Capital Intensive as before,
they are at reach to the every-day citizen. With easy access to information,
the World of Tomorrow will SEE opportunities equalizing, as power is
DECENTRALIZED. The children of the Asians, doomed to a life working at their
parents’ sushi restaurant in Europe, will now be able to Network and Connect
with likeminded people, creating wealth out of thin air. In that sense, the 4
Keys will all play their role:
- Education: Googling is great, but
I cannot put enough stress on the importance of a good, solid, formal
education. The education system today prepares people to become employees,
but not entrepreneurs. However, business education cannot be
underestimated. University does not provide all the tools, but gives you
the basic knowledge to do further research in your field. In my case, I
have specialized in Finance and Marketing through practical experience. In
those fields, I should have all the answers. But I also have good
knowledge of Accounting, Taxes, Legal, HR, Corporate Strategy… This means
that, even if I do not have all the answers in those fields, it is easy
for me to understand the perspective of specialists in these field and
communicate with them. Studying hard and having focus in your studies will
help you make further research in those fields even easier.
- Innovation: Ideate, Create and
Validate represent 3 steps towards Innovation, which refers to taking
something existing and transforming it to something that creates new
wealth or improves the well-being of society. As opposed to large
companies, Start-Ups initially aim at small, niche markets where they have
the possibility to escalate. Blue Ocean Strategy[1]
refers to opening uncontested market space by reconstructing market
boundaries, focusing on the big picture, reaching beyond existing demand
and getting the strategic sequence right. A great example of Innovation is
the Cirque du Soleil, which created a new market space, by blending opera
and ballet with the circus format while eliminating star performers and
animals. Don’t do what everyone else is doing. GO WHERE IT’S EMPTY.
- Entrepreneurship: have you
discovered the entrepreneur in you? Did you ever dream about becoming one?
What is your motivation? If it is only economical, you might never push
through. The greatest entrepreneurs had a vision to do great things for
humanity. Think about all the advancements we see today. Television, cable
TV, microwaves, smartphones, laptop… they were at some point created by
someone. Many people associate business with evil, but they forget that
the comfort they enjoy today has at some point been the fruit of great
ideas and also execution. Acquiring entrepreneurial skills was difficult
in the past, when you needed big investments to establish a company.
Today, knowledge, creativity and the right team is more important than
owning physical space. Test and prove your concept, and build the right
prototype…
- Venture Capitalism: getting
funding has become easier than ever. Whereas before business was done at a
more higher-level, today the tech industry allows the emergence of small
players, which by having the right exposure can attract angel investors or
venture capitalists who will invest their own money and contribute their
experience to help the business grow. Bringing highly valuable and skilled
players to act as mentors is something entrepreneurs at early stage can
benefit from. VCs will want all the details in your business plan, but it
is YOU they are making a bet for.
The 4 Keys to Value Creation
reminds us that our goal is to focus on what the customer needs to build
customized products or services, changing the Push concept from the Ford
Assembly line to a Pull concept in the latest Management Theory known as “Lean”.
Educational background will make you more efficient when acquiring new
knowledge. Innovation will allow you to unleash your creative spirit.
Entrepreneurial spirit will see to it that you push forward through all the
obstacles. And of course financing and mentoring from more experienced players
in the industry will make your learning curve much smoother. Have the skillset,
mindset, execute and build prototypes… and the money will come!!!
Cristian Bøhnsdalen
CMO/CFO and Co-Founder @ITRevolusjonen
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