Value Equation: How To Grow A Business To Millions

I’ve read many business books.
Few have the practicality of Alex Hormozi’s “$100M Offers”.

The more I read it, the more it seems like common sense.
At least it should be common sense.
But knowing something and executing it are different things.
And herein lies the value I’ve found in the book: the practical steps to take to reach the desired business outcome.
Condensed and to the point.

There are many nuggets and I recommend reading the book yourself.
Leaving aside the implementation, it’s his mental model of the value equation that has left the biggest impression.

Value =
(dream outcome X perceived likelihood of achievement)
/
(time delay X effort & sacrifice)

You can charge as high a price you want as long as the customer perceives the value to be higher.
To increase the perceived value, you’ve got to address each of the 4 aspects within the value equation.
Forget one and your offer (i.e. product or service) is vulnerable.

Most focus on addressing the need (i.e. realizing the dream outcome) and convincing others of the likelihood they can address that need (i.e. perceived likelihood of achievement).
The real value add, for the business as well as the customer, lies in the lower half of the equation.
The shorter the timespan in which you can accomplish the desired outcome (i.e. time delay) and the less effort – mental, physical or otherwise – it requires from the customer (i.e. effort & sacrifice), the more quickly the perceived value increases.

Humans are emotional beings and we don’t work on a linear scale.
The difference between a 3-month programme and a 12-month programme achieving the same outcome with the same effort is not a 4x increase in value but likely a 10x or higher increase in value.
Remember: value lies in the eye of the beholder.
Their perception is their reality.

The core of almost every business book is the same:

• Understand the needs of your customer better than others
• Address those needs most effectively and surpassing expectations (i.e. “overdeliver”)
• Do so in the most efficient manner
• Continuously improve
• Differentiate yourself in the eye of the customer to the point where you’re in a market of 1. This can be done in many different ways, one of which is “niching down”

Understanding business is not difficult.
Doing business is.
Alex Hormozi’s “$100M Offers” makes it that much easier and more approachable for most of us.
Highly recommended.