OGM Notes: Value Creation

The Personal MBA by Josh Kaufman

OG Millennial
May 01, 2025

As OG Millennials, it’s our responsibility to improve ourselves every single day. Whether it’s enhancing our emotional intelligence, expanding our self-awareness, or mastering a new skill, the goal is always progress. There are countless ways to achieve this growth, but one that I’ve found particularly impactful is reading.

The more I read, the more I learn about myself, others, and the world around me. And when I come across something that resonates deeply—something that I feel could add value to my life or help me improve—I make sure to take notes.

You might recall my thoughts on writing from a few weeks ago. Well, taking notes while I read is another way I’m putting that idea into action. I’ve been doing this for years, and now, I want to share some of the insights I’ve gained with you.

I’m calling these OGM Notes, and when you see that title in a post or email, know that I’ve read something that struck me and feel compelled to pass it along to my fellow OG Millennials. OGM Notes also allows me to give proper credit to the original author, so you’ll always know where the idea came from. It’s not just my perspective—it’s something I think will be valuable to you.

Speaking of value, that’s exactly what today’s OGM Notes are about: Value Creation. Based on the writings of Josh Kaufman in The Personal MBA, here are the key aspects of Value Creation that I believe are crucial to understand:

How Do We Create Value?

Make Something People Want
- The most valuable things often come from unmet needs that are now becoming fixable.
- Find something broken, something people need or want, and you’ll find an opportunity to create value.
- Every successful business creates something of value, and without value, no one will pay for what you offer.
The Five Core Parts of Every Business
- Value Creation: What you make.
- Marketing: How you get people’s attention.
- Sales: How you convert interest into transactions.
- Value Delivery: How you ensure the customer’s needs are met.
- Finance: How you make sure the business is profitable.
To succeed in business, you need to work on improving these five areas. Whether you’re creating a product or service, understanding these parts will put you in a good place.
What Do People Really Want?
- People are motivated by Existence, Relatedness, and Growth—basic human needs as outlined in Clayton Alderfer’s ERG Theory.
- These needs drive us to survive, build relationships, and improve our skills or circumstances. Successful businesses speak to these drives, whether it's offering more knowledge, power, love, or pleasure.
Social Status Matters
- People are often motivated by the desire for higher social status. This isn't a bad thing; it’s what drives many of our decisions.
- By incorporating social status signals into your business offer, you can increase its perceived value and appeal.
Working Smarter, Not Harder
- It’s often more important to work on the right things than to work hard at the wrong things. Evaluating the market properly is critical before investing your time and money.

10 Ways to Evaluate a Market

Urgency: How badly do people need or want what you’re offering right now?
Market Size: How large is the potential audience?
Pricing Potential: What’s the highest price the market is willing to pay?
Cost of Customer Acquisition: How much will it cost to get a sale?
Cost of Value Delivery: How much does it cost to create and deliver what you’re selling?
Uniqueness of Offer: How different is your offering compared to competitors?
Speed to Market: How quickly can you deliver?
Up-front Investment: What’s the initial capital needed?
Upsell Potential: Can you offer additional products or services?
Evergreen Potential: How sustainable is your offer over time?

Competition Isn’t a Bad Thing

Choose a Market with Competition: Competition signals demand. If there’s competition, it means customers are already paying for solutions in that space.
Be a Customer: The best way to learn about your competition is by becoming one of their customers.

How to Create the Most Valuable Offers

The most valuable offers do one (or more) of these:

Satisfy Core Human Drives: Whether it's for more power, knowledge, love, or status.
Visualize the End Result: Offer a result that’s easy to see, attractive, and compelling.
Minimize Hassle: The best offers eliminate as much effort as possible for the customer.

Economic Value Forms and Modularity

There are 12 standard forms of economic value that businesses can use to create value in different ways. These are not mutually exclusive; they can be combined to build the best offer for your desired customer. This strategy is called Modularity, and it involves bundling and unbundling value to cater to different customer types without reinventing the wheel.

Here are the 12 forms of economic value:

Product: Create a product and sell it for more than it cost to make.
Service: Provide help or assistance and charge for the benefits of the service.
Shared Resource: Create something that can be used by many people and charge for access.
Subscription: Offer a benefit on an ongoing basis and charge a recurring fee.
Resale: Buy something from wholesalers at a low price and sell it to retailers for a higher price.
Lease: Own an asset and allow others to use it for a predetermined period, charging a fee for the time.
Agency: Market or sell something on behalf of someone else and collect a percentage of the transaction price as a fee.
Audience Aggregation: Capture the attention of a specific group of people and sell access to that group, often through advertising.
Loan: Lend money and collect payments over time with interest.
Option: Offer the ability to take a predefined action for a set period of time for a fee.
Insurance: Take on the risk of something bad happening to the policyholder in exchange for a set of payments, and only pay out claims if the bad thing happens.
Capital: Buy an ownership stake in a business and collect the corresponding share of the profits as either a one-time payment or an ongoing dividend.

The Power of Flexibility

Flexibility is one of the most powerful assets in business. Offering more options or flexibility increases the likelihood of success.

The Hassle Premium

People will pay a premium to eliminate inconveniences. This is called the Hassle Premium.
Identify and remove hassle in your customer’s journey, and you’ll find more willing buyers.

Iteration and Feedback

Iteration is essential. Nobody gets it right the first time. Testing and refining your product is key to success.
Iteration Velocity: The faster you can iterate and learn, the quicker you improve.
Feedback: Get real feedback from potential customers—not friends and family. Use it to refine and perfect your offering.

Testing Assumptions

Critical Assumptions are key to your business’s survival. Test them early through Shadow Testing—selling your product or service before it exists to see if people are willing to pay.
Don’t skip Field Testing. Real-world testing ensures your product works as promised and can avoid customer dissatisfaction later.

Creating value isn’t just about building a product—it’s about understanding what people need, speaking to their core human drives, and offering them something they’re willing to pay for. If you focus on these key aspects, you’ll be on the path to creating meaningful value, building a successful business, and making a real impact in your industry.

Keep creating, keep iterating, and keep improving. Let’s go, OG Millennials.

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