Unscripted: Life, Liberty, and the Pursuit of Entrepreneurship pdfdrive com

~ Jack Valenti, Businessman

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IMPERFECT WORLD EQUALS PERFECT
OPPORTUNITY
How do I find a great business idea capable of a productocracy?
How do I find needs or create value?
I can’t think of any good ideas!
E
veryday I read something like the above. If you’re a terrible idea person, what
you’re really saying is that you make convincing excuses. Remember,
entrepreneurs are problem-solvers. Whenever you say, “I can’t find ideas,” what
you’re really saying is, 
the world is perfect and it needs nothing.
Only in a Utopian world are there no problems, needs, or wants. Everyone is
happy. Content and roasting marshmallows over the campfire. Whining about
not seeing ideas is admitting to world perfection. Or is the more likely answer?
That there aren’t any 
easy
problems, needs, or wants to be filled?
People who don’t see opportunity can't see it because they don’t want to see
what they need to see: unknown variables, new skills, hard work, trial and error,
risk, and failure. Instead, they look for something that doesn’t exist: the clear
path, the step-by-step blueprint, complete with a millionaire mentor, a VC-
funded bank account, and a fail-safe job waiting as a safety net. No wonder most
people are idea-empty. As Thomas Edison famously said, “Opportunity is missed
by most people because it is dressed in overalls and looks like work.”

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The Commandment of Need is our most important CENTS Commandment
for a productocracy because it defines our opportunity. If CENTS were a table,
the Commandment of Need would be the tabletop; the other four
commandments the legs. 
The Commandment of Need states that if you own a
controlled and entry-barred enterprise that provides relative value, satisfying needs
or wants, you will win growth, profits, and possibly, passive income for life
. You’d
think that such a simple idea—needs and wants—was Captain Obvious.
Entrepreneurship 101, right? Not exactly—more like advanced business strategy.
For instance, it's common for youngsters to declare such dreams as, “I want
to be a billionaire when I grow up!” Or, “I’m going to be rich!” What don’t you
hear? “I want to provide massive value when I grow up! I want to produce for
society!” And yet these are the things that lead to wealth. Wanting to be “rich”
but disrespecting value is like trying to solve the quadratic equation without 
a, b,
or 
c
.
Even worse, I never heard about value, needs, or wants in any of my college
business courses. Nope, instead we discussed marketing tactics like AIDA, the 4
Ps, and other textbook strategies designed to move merchandise. Product
viability or needfulness was never discussed, let alone on the curriculum! I also

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belonged to an entrepreneur club where needs or wants were never emphasized
as a success metric. In fact, a young entrepreneur at my forum confirmed
something similar. He said:
I recently had another meeting with my school’s entrepreneur club. The topic was
the essential steps for a start-up. I purposely kept my mouth shut so I could
observe what other people thought. To my surprise, no one said to find a solution
to a problem. Examples included: find partners, find something to make money,
make sure you have enough capital, and marketing. I was shocked that no one said
to create a product or service that somebody actually needs.
90
After encountering thousands of young entrepreneurs over the years, I’ve
discovered that the obvious wasn’t so obvious. For instance, it seems every
youngster under twenty-five who works out wants to start a fitness blog. Here’s
how it happens: An eighteen-year-old bubbling with postpubescent testosterone
hits the gym for the first time in his life. Six months and ten pounds of muscle
later, he suddenly wants to start a fitness blog. A similar story is repeated when
the overweight dude suddenly starts exercising and cans crap carbs from his diet.
OMG, I lost fifty pounds; I’m going to start a blog on weight loss!
Obviously, these would-be entrepreneurs are passionate about their story, as
they should. Regrettably, it never crosses their mind to ask: does the world need
another average blog backed by an average story dispensing average advice? Such
examples exemplify (again) why “follow your passion” or “do what you love” is
indifferent to market needs and not a business-building foundation. The market
is a spoiled brat, narrow-minded and singular in its purpose. It doesn’t care that
you shrunk six dress sizes or can bench press 315. Its laser-like focus is centered
on one fundamental truth: What value are you to me? What can I get from you
that I can’t get elsewhere, or am not getting well enough? Why do I need you or
your business?
ENGINEERING VALUE (AND NEED)
Look up the word “value” in the dictionary; it reads 
relative worth, utility, or
importance
. The key phrase here is “relative worth” or “relative value.” The
Commandment of Need’s central thesis is 
relative value
, and it’s the keystone to
becoming needed.
The richest people in the world are rich not because they create, control, or
manage just value, but value 
relative
to what already exists. Specifically, your blog

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full of fitness tips might indeed be valuable, but it isn’t 
relatively
valuable—it is
too ubiquitous when submerged into the global marketplace.
The importance of relativity could be seen in our fictitious city overburdened
with restaurants: If you open a pizza bistro and there’s already twenty-five other
pizza places nearby, have you provided relative value? Your pizza might be darn
good, but relative value doesn’t exist because more than likely, a few other pizza
joints are also darn good. Sand could be worthless or priceless depending on its
relativity in the marketplace: Offered in the Sahara, it’s useless. In a valley
preparing for a flood? Worthy.
Value is always relative based on market economics. And yet, why do so
many entrepreneurs insist on ignoring the market, and instead, selfishly think
they can tame the market to their personal fantasies?
So let me ask you: If I challenged you to create a company and within thirty
days that company had to achieve at least $10 million in sales, could you do it? I
know I could. And I wouldn’t need thirty days. Think about it again because yes,
it’s a trick question.
You see, my confidence in the challenge has nothing to do with my LinkedIn
connections or business savvy. Hopefully you noticed that the challenge centered
on $10 million in sales, not profit. To win, I’d offer a no-brainer value skew that
would flood my website with orders. What’s the no-brainer value proposition?
I’d sell hundred-dollar bills for fifty dollars.
As soon as word spread that this deal wasn’t a scam, sales would explode.
Customers would order, over and over. And therein lies the secret to becoming
needful (although not necessarily profitable) through the power of relative
worth: 
skewing value
.
PRODUCTOCRACY’S PULL: THE VALUE SKEW AND THE VALUE COMPETITION
In February 2016, at the annual 
Fastlane
Summit, I spoke in front of 150
entrepreneurs and opened with this offer: I held up a fifty-dollar bill and offered
it for sale at a steal of a price: just one dollar. Half the room raised their hands,
indicating they wanted to buy the bill; the other half sat confused and silent. So I
raised my voice and repeated the offer: “What’s wrong with you people? Who
wants to buy this fifty-dollar bill for one buck!?” Immediately a man in the tenth
row jumped up from his seat and ran to the front flailing a dollar in my face.
Sold!
I took his dollar and he got my fifty. Look at that: I just created $1 in sales!
Then I made the offer again.

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Except this time, I took out my entire wad of cash in my wallet, a pile of
money that amounted to over $1,000.
Everyone’s hand raised and several people jumped up.
“Hold up!” I said.
“You can buy my handful of cash for the same price: one dollar. Except
now…I have one condition…”
The audience anxiously waited to hear the condition.
“Before buying my cash for a buck,” I said, “you ALSO need to streak naked
through the casino.”
Suddenly everyone’s hands went down. There were no buyers.
So what changed?
The value competition.
Behind this offer is something rarely discussed in entrepreneurial circle jerks.
Anytime someone gives you money, that person has said, “Congratulations,
you’ve won the value competition.” You see, everything you buy is subject to a
value competition: a weighted evaluation with respect to your preferences. This
evaluation ultimately determines who wins your money and who does not.
In our original offer, the value competition was straightforward: “Gee, for
one dollar in foregone buying power, I receive fifty dollars in return for a net
buying power increase of forty-nine dollars.” The value competition is a no-
brainer.
Unfortunately, in real marketplace exchanges, the value competition isn’t so
clearly defined. When I added the “condition” of a streak through the casino,
suddenly the value competition got complicated. When potential buyers thought
about possible consequences—getting embarrassed, potentially arrested,
YouTubed, and whatever else they deemed a part of the value competition—
hands sank like anchors. The net gain in net buying power didn’t justify the
other potentialities.
The value competition games your head anytime you consider buying
something. It determines when Brand X is bought over Brand Y. Within this
weighting game, you analyze multiple buying attributes for each offer and
determine where the value skew exists. 
The value skew identifies the winner in the
value competition.

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For example, let’s say you’re looking to buy Brand X. Brand X is the cheapest,
and it’s endorsed by Dr. Shnoz. However, you also notice several other things.
Brand X has no reviews. The website looks like it was designed in 1999: the
pictures are blurry; there’s no “about us” link; and Comic Sans font is
everywhere. You can’t find a refund policy, a telephone number, or how much
shipping costs. All these things are noted in your head.
Brand Y, however, is 22 percent more expensive and isn’t endorsed by a
celebrity. However, Brand Y has a professional website with clear photos, an
“about us” page with an intriguing story, a clear refund policy, a toll-free
number, and an impressive collection of positive reviews. Brand Y also has free
shipping.
In your value competition of Brand X versus Brand Y, you make a weighted
determination on attribute importance and make a decision. You might be
swayed by Brand X’s cheap price, whereas others might be dismayed by Brand
X’s poor public appearance. The point is: 
this competition strikes everyone
differently.
How Money Moves: The Value Array And Their Attributes
Underneath the value competition and a winning value skew is a collection of
value attributes, the value array
, which inherently characterizes all market offers.
Just as you have attributes—height, weight, hair and eye color—each

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marketplace offer also possesses identical traits. These attributes and their
corresponding value arrays are different for everyone.
In my streaking offer, an aspiring porn star might have accepted the deal
because nakedness was discounted (or didn’t exist) as a value attribute. Identical
offers have different attributes for different people—one buyer might perceive
three attributes while another twenty. Altogether, the value array and its
attributes frame the offer to the consumer, who then subjectively evaluates it
against other options.
If you’re a single lady, you use a value array and its attributes to determine
dating decisions: Justin has a great job, a nice dog, no baggage, and is tall, dark,
and handsome, while Trent lives with his mother, has two kids from two
different women, and is short and stocky. Which man do you want to date? The
answer springs from the value competition, the value array, and the attributes
important to you.
The value array and its attributes are the measuring stick delineating YES, I
want to buy this, or NO, I’ll look elsewhere. You NEVER know which attribute is
the lynchpin that causes someone to buy or not to buy.
For example, my friend who sells competitive products on Amazon modified
his photos to simulate motion. Instead of a product that looked stationary, it now
looked dynamic. An example of this would be an air purifier: you could display
the purifier as is, or you could Photoshop “air waves” emanating out of the
purifier to simulate action. Infomercials do this notoriously as well, using a
variety of techniques: bells, dings, and animated bursts. His competitor's photos
did not simulate motion. As a result of this simple change—
one attribute
improved and skewed
—he tripled his sales.
Here is just a sample list of value attributes that could frame your offer in the
mind of your potential customer.
Your Price
Professionalism
Price Ambiguity
Compelling Story (About Us)
Ease of Ordering
Label/Packaging Design
Website Design
Affiliations or Associations
Cleanliness
Customer Service
Guarantee
Crisp, Clean Photos
Refund Policy
Public Reviews
Included/Excluded Ingredient
Celebrity Endorsements
Ambiance
Comfort

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Ambiance
Comfort
Product Features
Security
Payment Options
Shipping Speed or Cost
User Interface
Bribed Reviews
Employee Photos
Website Recently Updated
Skewing value and winning sales boil down to the value array. And if you
don’t have a business yet, the value array can be used to exploit potentially potent
business opportunities.
The value skew pulls the Commandment of Need’s cart. Skew value clearly
and overwhelmingly, and that cart fills with cash. 
The value skew is the force
behind the pull of a productocracy
. Companies that do not skew value do not
satisfy the Commandment of Need, and they do not survive.
In fact, not only is the value skew responsible for growing great companies,
but it’s also the dynamic behind any scam. Greed is a duet staged on irresistible
value skews. If someone offers such a warped “too good to be true” value
proposition, more than likely it’s a fraud underway. When Jimmy thought he
could meet a stranger in the Publix parking lot and buy a new fifty-dollar iPhone
advertised on Craigslist, greed (the scammer skewing value) met greed (Jimmy
the consumer, looking to get a screaming deal). A warped value skew—usually
predicated on price, big returns, or incredible savings—is the “pull” behind all
scams and their meteoric growth. Fortunately for us, we can succeed without
misrepresenting value. We can own the skew by exposing and reverse
engineering any product through its value array.
Skew Value, Kill The Competition
Remember my fake “money company,” where I sold one-hundred-dollar bills
for fifty bucks? Let’s assume the transaction process involves snail mailing a fifty-
dollar check to a post office box. Two weeks later, you receive a hundred-dollar
check in return. Here the value array consists of three dominant attributes:
1.
Monetary value
2.
Convenience
3.
Risk
Fifty dollars spent, delivered fifty dollars more in clearly defined monetary
value. Of course, value attributes aren’t usually obvious but involve quick
subjective interpretations. In this case, convenience and risk are also attributes.

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First, the order process is not convenient because one has to write a check to an
anonymous post office box, which seems doubly dubious, peppering the
transaction with risk. Once the communicated and perceived value (Buy $100 for
$50!) turns into delivered value, sales will grow as word spreads. If
communicated value isn’t delivered—hence, you over-promise—word also
spreads, except in this case, sales do not grow.
So let's assume that the deal is legit. Now let’s assume that a new competing
“money company” surfaces. They too are selling hundred-dollar bills for fifty
bucks. Except this new company doesn’t require you to snail mail a check to
some post office box: they offer immediate, online processing; you PayPal them
fifty dollars, and wham, ten minutes later, your PayPal account is credited with a
hundred dollars. Both companies are selling the same product with the exact
same monetary value. But which company will grow faster and steeper?
Obviously, the new company will outsell and outgrow the old company.
They’ve dissected the value array and skewed value on 
two additional
transactional attributes
—faster processing and risk mitigation—while providing
the exact same product.
Whenever a company grows exponentially, look no further than the value
array and its attributes. How many of them have been skewed favorably?
Exponential growth goes beyond just a cheap price; it occurs when multiple
attributes have been skewed.
Take Uber, for example. They’ve disrupted the ground-transportation
industry, specifically on-demand taxi service. Since my background is in ground
transportation, I’m familiar with the industry’s value array. When I first used
Uber, it became pretty clear why the company has blown up to become its own
verb—a.k.a., grab me a Kleenex and let’s Uber it home. Every value attribute was
skewed: not just one or two, but all of them. Here’s the array and just a few of its
primary value attributes:
Speed
Cost Ambiguity
Reliability
Comfort / Cleanliness
Accountability
Choice
Payment Ease
Cost
Now let’s compare each attribute with a taxi service, the industry Uber set
out to disrupt and, by all measures, is destroying.

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Speed: Whenever I order a cab, their arrival takes forever. With Uber, you
know when it will arrive.
Cost ambiguity: You never know how much a cab costs. With Uber, you do.
Reliability: Whenever you order a cab, dispatch always seems to say “ten
minutes” and yet, ten minutes always seems to really mean one hour.
Comfort/cleanliness: I never know what gunk, gum, or jizz I’ll find sitting in
a cab or stuck to the door handle. With Uber, I see the car and know it will probably be
clean.
Accountability: Get taken for a ride in a cab and the driver doesn’t give a
shit. If an Uber driver doesn’t perform, they receive a bad review and, hence, endanger
their ability to do future rides.
Choice: With a cab, you never know who will show up. With Uber, you have
a choice.
Payment ease: With a cab, you have to fumble with cash or give the driver
your credit card. With Uber, all rides go through your pre-registered credit card.
Cost: The Uber ride is usually cheaper than a cab; plus, you get all the
benefits described above.
When a business goes from zero to billions in just a few years, you’re
witnessing a productocracy powered by a value skew, which goes beyond a good
price. Multiple attributes get primped and groomed.
On the contrary, companies die when there is no value skew.
Think about the last time you made a buying decision and decided against a