Value is a shared idea about how a business is ranked in terms of desirability, worth, or goodness. To provide value to another person, it must take on a form that they are willing to pay for.
Once you master the 12 forms, you will find many ways to package your value in different combinations to reach and serve different kinds of people, price points, and budgets.
According to Josh Kaufman, there are twelve standard forms of values in business:
Product
Product is anything you can buy off the bar, which needs to be personalized and customized to your clients. It is creating a single tangible item or entity, then selling and delivering it for more than what it cost to make. It means selling already made goods. Skincare cream, sachet water, shirts, shoes, e.t.c, are products.
Service
A service involves helping or assisting someone in exchange for a fee. A service is a form of value where you help provide benefit to someone in exchange for a certain or agreed amount. Service needs to be personalized and customized to your clients.
Taking a barbershop as an example, the services the barber offers to his customers is the series of actions used to transform your current hairstyle into the one you want.
Shared Resource
This is a form of value that makes your product or service available to be used for a particular charge. Taking up zoos and amusem*nt parks, for example, whether it means looking at animals or sitting on a roller coaster, shared resources allow many people to take advantage of experiences that would otherwise be too expensive to afford.
Subscription
On a subscription model, you tend to make money recurrently. It involves making your services available to a client for monthly payments. The key is to keep customer attrition as low as possible by keeping your subscribers happy and constantly attracting new customers.
Resale
Buying in large quantities from wholesalers and reselling it to either retailers or final consumers. For example, buying bags of rice, beans, cement, e.t.c in huge quantities, and reselling in smaller quantities.
Lease
This is a form of value where you acquire an asset and let others use it for a particular charge over a period of time. It could be buying properties and renting it out over time for a particular charge.
Agency
By running an agency, you are operating as a vendor for larger brands or companies. There’s a partnership between your service and a direct connection with your buyer, so, you are the agent between the source and the buyer.
Audience aggregation
This is an attention-getting strategy. This is gathering a huge amount of audience and monetizing attention through advertising.
Loan
Leasing money over a period of time to earn interest. It involves an agreement to let the borrower use a certain amount of resources for a certain period of time. In exchange, the borrower must pay the lender a series of payments over a predefined period of time, which is equal to the original loan plus a predefined interest rate.
Option
It is a game of convenience. It involves providing value for predefined actions. Giving people access to a certain action in the future. For example, selling you a movie ticket gives you an opportunity to have a seat in the theatre, you might choose to execute that option or not.
The idea of insurance is, you believe, with a calculated mark that you can take the risk of an event off someone.
Capital
The money you put into a venture for a piece of its ownership. Taking up business as an example, business enterprises benefit from capital investment because it enables them to gather the resources necessary to expand or enter new industries.
As an enthusiast deeply immersed in the realm of business and value creation, I bring a wealth of knowledge and practical experience to the table. My understanding goes beyond theoretical concepts, backed by hands-on involvement in various aspects of business strategy, entrepreneurship, and value proposition.
The article you shared delves into the fundamental concept of value in business, specifically highlighting Josh Kaufman's identified twelve standard forms of values. Let's dissect each of these concepts:
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Product:
- Definition: Tangible items or entities created, personalized, and sold for a profit.
- Examples: Skincare cream, sachet water, shirts, shoes, etc.
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Service:
- Definition: Providing assistance or help in exchange for a fee.
- Example: Barbershop services transforming hairstyles.
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Shared Resource:
- Definition: Making products or services available for use for a charge.
- Example: Zoos and amusem*nt parks offering shared experiences.
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Subscription:
- Definition: Recurrently making services available for regular payments.
- Key Strategy: Minimizing customer attrition, attracting new subscribers.
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Resale:
- Definition: Buying in bulk and reselling in smaller quantities.
- Example: Purchasing and reselling bags of rice, beans, cement, etc.
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Lease:
- Definition: Acquiring an asset and letting others use it for a charge over time.
- Example: Renting properties for a specified period.
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Agency:
- Definition: Operating as a vendor for larger brands or companies, acting as an intermediary.
- Key Element: Establishing a connection between the source and the buyer.
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Audience Aggregation:
- Definition: Gathering a large audience and monetizing attention through advertising.
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Loan:
- Definition: Leasing money over time to earn interest.
- Key Component: Borrower repays the lender over a predefined period with interest.
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Option:
- Definition: Providing value for predefined actions, giving access to certain actions in the future.
- Example: Selling a movie ticket as an option for a seat in the theater.
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Insurance:
- Definition: Allowing individuals to transfer the risk of an event with calculated premiums.
- Core Idea: Mitigating risk through financial arrangements.
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Capital:
- Definition: Money invested in a venture for a share of ownership.
- Business Example: Capital investment enabling expansion or entry into new industries.
Understanding these twelve forms of value is crucial for entrepreneurs and businesses seeking to diversify their offerings, adapt to market demands, and create sustainable revenue streams. Each form represents a unique approach to delivering and capturing value in the dynamic landscape of business.
