Visualising "Value is defined by others"
Updated: May 12, 2022
Vikas Kapil ,Dave Jarman and I have been working on a series of animations to illustrate the threshold concepts of entrepreneurial thinking. This is the third threshold concept in our collection of seven. You can read about the whole set at www.lucyhatt.co.uk.
This is how we're envisaging "Value is defined by others"
We're using the principle of "generalisation", an aspect of Variation Theory*, where we learn about something by experiencing varied appearances of the same value, to explain the threshold concepts.
Thinking entrepreneurially means understanding that value is defined by others. Other people demonstrate the value they place on what has been created by being prepared to give something in exchange for it such as money, time or goodwill.
Let’s look at this concept using a skateboard maker. They’re offering the ‘latest skateboard’ to the market. They’ve put their heart and soul into making this their best board ever. They’ve protected their technological advances from the eyes of their competitors carefully and now the day has come to launch their new product.
They have an idea of the value of their product and price it accordingly.
However, their customers will subjectively determine the value of the product to themselves, and consequently may have a different idea of the price that represents “good value” for them.
The product may be put to a different use and a completely different value may be determined. Other target customers may perceive no value in the product at all, or a much greater value than was envisaged by the maker.
If we are thinking entrepreneurially, we understand that only ‘other people’ can define the value of what we have created.
The first potential customer of the skateboard maker is a rich wanna-be boarder, concerned about their image, who is looking for a fancy skateboard to hang on their wall and look cool alongside all their other branded goods – they have a different perception of the value of the board versus the sale price. It isn’t expensive enough for them to value it.
Their second potential customer is a keen and talented skateboarder who hasn’t got a lot of money - they think the board is a little expensive for what it offers technically.
Their third potential customer is a busking musician looking for something that they can use to move their piano about from place to place.
Their fourth potential customer is a snow-boarder who doesn’t want a skateboard, so for them the wheels are unnecessary.
But one thing is for sure, the value that the value creator (the skateboard maker) has attached to their offer (the skateboard) means nothing on its own, in isolation. The value of the skateboard is determined by its potential users and by the service it is put to rather than the value attached to it by its maker.
Value is defined by others.
*See: Marton, F., Runesson, U., & Tsui, A. B. M. (2004). The space of learning. In F. Marton, A. B. M. Tsui, P. P. M. Chik, P. Y. Ko, & M. L. Lo (Eds.), Classroom discourse and the space of learning. Mahwah, NJ: Laurence Erlbaum.