Reflections On Value
Throughout the process of building a successful digital agency, the concept of value has resurfaced over and over again. I’ve been thinking about it a lot lately and wanted to make some time today to organize and share those thoughts.
I once heard money referred to as “basically nothing more than stored energy” by Jordan Belfort, the Wolf of Wall Street.
It’s a new twist on the classic expression “time is money,” which is so pithy that its depth is often overlooked (at least by me). Like I mentioned in my post on building habits, many common sayings have a lot of truth packed into them, but sometimes without context or sufficient reflection that truth can is lost.
So today we’re going to take some time and use both of these sayings as a launch pad to talk about what value is and where it comes from.
⚠️ The following could get slightly philosophical. Turn back here, all ye who fear, uh, thinking.
What is value?
Let’s start by defining value. I think a good way of describing value is this: that which narrows the gap between a person’s current self and their desired self.
Current self: straightforward enough. Who you are, what you have, everything about you as you exist at this moment. And what is the desired self? The person who is better off than you, who has more and wants less. The gap, then, is how far away your current self is from your desired self (the essence of sales is exaggerating this gap and then providing a solution to bridge it).
You could simplify this further: value is progress towards happiness.
With this thought in mind, we could say that value comes in two forms: potential value and actual value. Potential value is something which doesn’t directly get you what you want, but does bring you closer to it. It’s always tied to some kind of actual value, which is the thing you want.
Accordingly, nearly all value is ‘potential,’ insofar as it is all striving for one ultimate end goal, which is increased happiness. You could say that the only ‘actual value’ that exists is goodness, or increased happiness. But increased goodness is a by-product of potential value, a by-product of reaching for increased goodness. The closer you get to ✨ Ultimate Happiness ✨, the happier your progress makes you.
You can also place value on a spectrum of tangibility, especially as it relates to motivation and desirability.
The more tangible some piece of value is, the easier it is for your lizard brain to understand and desire. The less tangible that value is, the more your higher functions need to work to appreciate it.
Something that’s really tangible would be a hamburger: you can see, feel, smell, and taste a hamburger. It’s very easy for your lizard brain to grasp the value of a burger.
A moral compass, on the other hand, is far less tangible. It’s not evident to the senses, and the immediate benefits of a moral compass are relatively low. But it comes into play in the long run in terms of building a positive reputation and contributing to society as a whole.
There’s a lot more we could write on the tangibility of value, but I think that’s enough depth for another post. For now, it’s easy enough to state that the more tangible something of value is, the more desirable it is to your animal functions, and the less tangible value is, the more desirable it is to your higher or human functions.
This might not seem like a significant statement, but it comes into focus when you’re attempting to determine a suitable reward for building a habit, for example.
Anyway, moving on to a more fundamental question…
Where does value come from?
Belfort was hinting at this when he said money is nothing more than stored energy. Where does energy come from? You could answer ‘food,’ or ‘personal investment,’ but those aren’t quite fundamental enough.
The answer is in the saying “time is money.” If money is just a way to quantify value, then value is stored energy, and you store energy… over time.
Sure, personal investment and building habits and eating food all generate energy for you, but each of these processes takes time to complete. And let’s not also forget that it’s not just about having energy – you need time to use that energy, too.
So, value comes from transforming time by energy.
How do we create value?
If value is just time transformed by energy, we should all have tons of value and be very happy people. But that’s not the case.
Simply assuming that
Value = Time * Energy
Is not sufficient. There’s got to be something else to it, because you can spend a lot of time doing something that takes up a lot of energy, and end up not creating any value in the process.
I learned that the hard way when I spent three years learning SEO, sales, and marketing… and abysmally failing to build a digital marketing agency (I’ve since deleted the word ‘marketing’ from that phrase, and I’m a lot happier).
What went wrong? After reflecting on my failure for a while, I concluded that I was chasing the wrong value.
I’ve seen a lot of people succeed in the SEO industry, and they nearly all have one thing in common: they were formed to value money very highly, typically by growing up in a very low-income household. I think the reason they have succeeded where I did not is just that simple. They’re wired to think of money as holding more value than anything else, at least when it comes to their business.
I grew up in a middle-class environment where there was never a serious lack of money. Money is important to me, sure, because money equals freedom… but to me, value is more about what the other person is getting out of my services, rather than what I’m making from it. I get more happiness (or, more ‘less badness’) out of helping other people than I do out of getting paid.
This means that I tend to be hard on myself when it comes to quality of deliverables, and I have a difficult time reconciling the variability of SEO results with the amount of money that people spend for them. And, as all good salespeople know, if you don’t believe in your product, you won’t be able to sell it.
Anyway, I digress. The point is, there’s another factor at play here, and that’s the reason we are multiplying time by energy. The value that we are looking for, the happiness we are trying to get. So really, the equation looks like this:
Value = Time * Energy * Motivation
To summarize everything into one statement, then:
Value is the accumulated investment of time and energy into narrowing the gap between somebody’s current self and their desired self.
It’s a reasonably intuitive proposition, but as with many things, I find that thinking through and defining the concept enables more informed and more effective decision making.