Value creation and why it is important to business success

Starting a business is one of the most important decisions you make in your life.

However, if you want to create a successful business, there are a lot of factors you must consider before launching your idea to the world.

In this article, I will dedicate the focus on one of these factors, which I believe is the most important, which is value creation and why it is important to business success, without it any business cannot prosper.

Why value creation is important to business success?

Think about your behavior toward certain consumer product, let’s say the smartphones industry.

You’re most likely to consume the product that provides you with the most value from your perspective and what you believe is valuable.

value creation cycle

This value could be, the design of the product, the operation system, or the applications they provide. Also, it could be a combination of all or some of them.

The value any product creates is a reflection of what you believe is most valuable to you unless you don’t know what you are looking for, then we could argue otherwise.

Thus, to be successful in business, you must look for what gives the customers the most value from their view, not yours.


What is value creation?

It is the process of identifying a product or service that people want, and willing to pay for and give it to them.

There are several different forms of value creation, but the prime purpose is always constant; to make life easier and better for others.

How would you know what people want? 

There are a couple of ways to get people to tell you what they want. Here I’ll guide you toward the most effective, faster, and easier ways to gather this information so you can provide the most value as possible.

a person surveying another person

Here are the methods you could use to gather the data you need for your business or niche:

  1. Surveying

There are different tools to survey people, however, the following are the best in my opinion.

  • SurveyMonkey
  • Google forum

Surveying is work best if you are not yet started a business or you don’t figure out your niche market yet.

That doesn’t mean it didn’t work well with existing business or market, it still works but if you just starting, it’s a very powerful method.

2. Email.

Email marketing is by far the most effective way to promote your product or service, making announcements, and much more.

There are a lot of advantages with email marketing, however, it works best if you already have a customer’s base and existing market.

Here are some of the email marketing tools you could use:

  • Convertkit
  • Getresponse
  • Mailchimp
  • Aweber

Use these tools to scale up your business and grow your customer base, or start collecting emails if you’re new and just getting started.

Is what you create economically valuable?

Any idea can be turned into a business, however, not every idea can turn into a profitable business.

If your business doesn’t provide any economic value both for you and your customers, then you can’t call it a business, it is maybe something else.

Let’s say you enjoy fishing, it’s highly unlikely anyone will pay to watch you set up traps to fish unless you dedicate your skill to the benefit of others.

Switch from personal interest of going fishing to a product or service for those who love fishing but don’t have the knowledge to do it.

Point of conversion

You may sell fishing rods and accessories or starting a fishing training course.

Always find a way to create economic value from an idea, and you’ll inevitably find a way to get paid.

Is what you create attracting a large audience? 

What if you launch a campaign and no supporters show up after you spend all that money on signs, flyers, and ads, etc. In business, this happens every day.

Let’s take the Segway as an example, the Segway is a personal motorized scooter brought to the public market in the year 2001 by Dean Kamen.

According to Dean, Segway will revolutionize the transportation industry and replace cars.

After spending over $100 million on development, they claimed that they are expecting 50,000 units to be sold every year.

Couples riding the segway


However, when the Segway publicized in 2002 they were able to sell only 30,000 units in the first six years of the operation.

Their problem wasn’t that the product is poorly designed or the technology they used was obsolete.

The problem was that they don’t have enough audience, people have not been convinced how the Segway would replace cars.

See more about Segway on wired.

The example of the Segway happens in the business world every single day, Josh Kaufman in his book “The Personal MBA” called it ‘The Iron Law of the Market’.

He encourages the idea of serving an existing market rather than building a new one then find people to sell it to.

If you are wondering how to attract customers to your business, re-read where we talked about why value creation is important to business success and how to survey potential customers.

For more in-depth about value creation checkout Josh Kaufman.

*Note: I’m not associated with Josh Kaufman or affiliated with him by any means, I’m just pointing to what he said because I believe it’s extremely valuable.’    

Recurring revenue.

Value creation means continuous profit, it doesn’t matter if that in an automated website or a brick and mortar a.k.a (Physical store).

If your business doesn’t bring enough revenue regularly, it can’t be sustained and sooner or later it will crumble.

Revenue cycle

I mentioned previously that you should ask people what they want and give it to them.

When people tell you they need such and such that means they’re willing to pay for it regularly and continuously, because it provides value to them.

Always look for what others want and give it to them continuously, people are the most valuable asset in your business for both success and financially independent.

Value creation means Differentiation 

Copying others and doing the same thing over and over is not a good way to create value.

In the book ‘Zero to One’ Peter Thiel argues that there are two ways of making progress, Horizontal and Vertical.

Horizontal progress or copying i.e. (Globalization), is the practice of taking what already exists and make it work everywhere else, which takes us from 1 to n(noting).

Stand out colorful text

This way of doing business cannot provide any form of value to the customer, because there is someone else already doing it. So, why should a customer come to you in the first place?

Contrarily, Vertical progress (Innovation) is the practice of making new value or maximize on an existing one and make it even more valuable, which he referred to as 0 to 1.

Peter Thiel gave an example of PayPal a company he co-founds vs. eBay regarding how they handle electronic payments.

eBay used checks to pay its customers after an auction session ends, but that payment takes about 7-10 days to reach customer’s mail.

Now the transaction has been done online but the payment process is obsolete and it takes time to execute.

When PayPal appears on the map, it revolutionizes the payment process, buyers and sellers were able to transfer money instantly.

PayPal vs. eBay is a perfect example of vertical progress and how to go from 0 to 1, also a prime example of value creation which people love and appreciate.



Differentiating yourself by taking a vertical 0 to 1 approach to creating value is way more effective than horizontal progress 1 to n (nothing).

To have a successful business you need recurring revenue that allows you to sustain your business

Unstable revenue could be a sign of invaluable business, make sure you are giving people what they want.

Creating a product or service without an existing market is like playing the lottery, hoping things will work out, and reality can hit you at any given time.

Make sure you have a large base of an audience who are willing to pay for your service or product before you make it.

Finally, value creation is important to business success, and to create value, you must ask people what they want and give it to them.



  1. Personal MBA
  2. wired
  3. Zero to One, by Peter Thiel

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