The foundation stone of value creation

How do people find out that something is valuable for them? 

Let’s look into a primal tribe. Simple examples are often helpful for deep understanding of the subject. A savage is thirsty. Water is a value for him in any case. You have some water in your house. But your water doesn’t represent any value for him because the savage doesn’t know about its existence.       

We don’t value anything before we learn about its existence.

Let’s move on. We find a sturdy stick and sharpen one of its ends. We show it to a savage. It is not a real value for him yet. Maximum that can be expected is his
interest for this stick. But if we show him how it helps to kill an animal his interest transforms into a desire to get this sharp stick for himself. We name it “spear” and begin to make those sharp sticks for other savages in the tribe. We say: “Come on, take this spear. It will help you to get some food”. Savages begin to hunt with these
spears and understand that they are really helpful. When a savage from the other tribe meet a savage from our tribe he would ask him: “what an interesting stick! What is it for?” Our savage would answer: “It is a spear. It helps me to hunt”. “Where did you get it from? I want such spear for myself” – asks the savage from another tribe. “We have a skillful craftsmen in our tribe. Go ask him yourself”. The savage from another tribe comes to you and asks for a spear. You tell him about the benefits which can give him a spear and offer to exchange a spear for a fleece, for example. The popularity of spears is growing. Savages from other tribes come to you to get spears in exchange for other goods until they learn to sharpen sticks themselves.

It is a primitive scheme of value creation. But this mechanism works everywhere. The point is that it is not enough to have something or to invent something. You have to tell people about it. You have to show why something is valuable for them.

The role of communication in value creation is crucial. If you don’t know the language of these savages, if you are unable to show how to kill an animal with a spear these savages wouldn’t understand how a spear can benefit them so they wouldn’t care about spears. And when people don’t care about something it has no value.