More than just revenue: The art of creating real value as an entrepreneur
Many entrepreneurs start their journey with a brilliant idea or a desire for quick turnover. But did you know that a lack of understanding of value creation is one of the most common reasons why new businesses fail? To build a sustainable business, you need to look beyond the invoice and understand what the customer is actually paying for.
What really is value?
Value creation is not about product development in a vacuum, but about the moment you solve a problem or fill a need that the customer values more than the money they pay.
A classic example is the local plumber:
The turnover is the amount on the invoice.
The real value is the security of a sealed bathroom, the time the customer saves, and the avoidance of future water damage.
As an entrepreneur, your most important task is to maximize this value for the customer, while keeping your own costs down.
Find "painkillers," not just "vitamins"
To create value as a commodity, you need to identify a real market problem. A good sign of such a problem is that it is "bad" enough that people are actually willing to pay to get rid of it. We often distinguish between:
Vitamins: Something that's nice to have.
Painkiller: Something that needs to be resolved here and now.
For example, if you see that small businesses spend ten hours a week on manual paperwork, you're not just selling an app – you're selling "freed up time" and "reduced stress."
Four paths to value creation
In a good business model, value is often created through four channels:
Functional value: The job is done faster, cheaper or better.
Economic value: You help the customer save or make money.
Psychological value: The customer feels increased status, security or belonging.
Convenience: You make something simple that was previously complicated.
Don't build blindly – put the customer at the center
One of the biggest traps you can fall into is falling in love with your own solution before you understand the problem. You need to validate the need through neutral interviews and observation. Don't ask the customer "Would you buy this?", but rather ask them to tell you about the last time they experienced the problem.
Remember that the price you set should not only cover your costs, but also reflect the perceived value to the customer. If your solution saves a company 100,000 kroner, a price of 10,000 kroner is a simple investment – regardless of what it cost you to create it.
Do you want to learn more about how to succeed as an entrepreneur?
Mastering the principles of value creation is just the first step on the journey. To lay a solid foundation for your business, a deeper understanding of market forces, positioning, and financial management is required.
We recommend the free course Principles of Successful Entrepreneurship at Komhub. Here you will get the tools you need to go from idea to a sustainable business that actually creates value in the market.
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