A Framework to Maximize Value

Newsletter #17

Life’s good! Signed a new client and both Twitter and the Newsletter are growing nicely.

Some big ideas brewing as well but too early to share that yet. So for now I’ll just open with this…

We all want to do something valuable, right?

It’s at the core of every business and shared by all gurus: “deliver value”.

(High Value = Lots of 🤑🤑🤑🤑)

This results in some fancy slogans:

• IKEA: "To create a better everyday life for the many people."

• Google: "To organize the world's information and make it universally accessible and useful."

• Amazon: "To be Earth's most customer-centric company…”

But wth does any of that even mean? Like how do you do this?

Luckily, Alex Hormozi has come to the rescue again:

He’s turned the word “Value” into an equation that we can now optimize for. It’s a work of art.

I like this one so much because it gives something to ‘fill in’, without becoming some ‘fluffy’ academic exercise.

As the image shows, this is how Value can be created:

1. Focus on reaching a Dream Outcome

2. Make this outcome (seem) achievable/guaranteed

3. In a reasonable timeframe

4. And with minimal effort required

Maximize 1 + 2, minimize 3 + 4.

I put everything I do now through this lens.

Example time

Let’s start with… me… Fractional CFO services 📊

There are a lot of deliverables a Fractional CFO can have with a client:

• Weekly Cash Flow Forecasts

• Monthly Financial Reports

• KPI Dashboards

• Custom Models for Strategic Initiatives

• etc etc.

But the last thing any ‘service’ provider wants to do is deliver a report that is not solving a specific problem, aka that isn’t valuable.

For instance, a marketing agency that is swimming in cash has little value for a weekly cash flow forecast, whereas this is vital for a seasonal agriculture business.

But what makes it difficult is that the client often doesn’t know what they need (if they did, they wouldn’t need me).

So to figure out what would be worth doing, we maximize the value equation.

1. Dream Outcome: this is always unique. Does the client care about making more money, saving money, gaining confidence, or selling the business?

2. Perceived Likelihood of Achievement: will my output be actionable? Does it address the issue that’s holding them back?

3. Time Delay: what information would they need to get the dream outcome ASAP?

4. Effort & Sacrifice: can I eliminate any work for them?

It’s a great way to keep making sure you focus on what’s actually valuable.

Example: Content Creation ✍🏻

Writing is hard. Writing content is harder. Writing content that people like is 🤯.

Still, this framework is pretty useful.

1. Dream Outcome: what do you want the reader to achieve after reading this? Be entertained? Inspired? Ready to take action?

2. Perceived Likelihood of Achievement: how can you convince them this is achievable? A detailed step-by-step? A video? Images?

3. Time Delay: can you share tips that would save them time?

4. Effort & Sacrifice: can you share tips that would save them effort?

Thinking of it, I need to use this more.

Example: Commodities- Tulips 🌷

Now, tulips are, of course, not just a commodity.

But they are a good example. This will also go for selling milk, wheat, steel, eggs and you name it.

What makes commodities unique is that you are competing on price, not quality.

That has some interesting implications.

One implication is that the value creation shifts from the product side to the production side.

Meaning: a commodity business creates value by being a cheaper, faster, more efficient producer.

So, different initiatives to ‘create value’ can now be quantified:

1. Dream Outcome: will this project or idea lower production costs?

2. Perceived Likelihood of Achievement: how likely is it to succeed?

3. Time Delay: how long will the implementation take?

4. Effort & Sacrifice: what will be required?

I hope you get the gist of it.

Always maximize this framework!

Best of the Week

Super interesting thread by the creator of The Morning Brew. Lots of cool ideas in here and some great answers.

Just one more image. This one made me laugh.

Ending it with one simple request:

Go and do something valuable with your life!!

You now know how to measure it. Use it!

Till next week 🌷

Joey