Tell Me Your Value Equation

Transform,Idea,Intro,Business,Concept

Every company feels like it has what it takes to make a difference in its customer’s lives. No matter what product or service they offer their clients, all companies feel like they can do it better than anyone else. So what makes one company stick out from another? Is it how much money that company makes for its own bottom line or is how much it helps its customers? When it comes to investing and getting behind a startup company or an entrepreneur, the real question is what is your value equation? That’s according to silicon valley’s legendary entrepreneur Rob Ryan.

What Sets Entrepreneurs Apart?

Rob and I spoke about his experience with helping entrepreneurs, which is his main focus now since retiring from running his company. In 1999, Rob sold Ascend Communications, which helped create and build the entire infrastructure of the Internet, to Lucent Technologies for about $24 billion. To this day, this deal still holds the record as the the biggest merger between technology companies. Rob is now the Chairman and co-founder of Hero Club, which is an organization dedicated to training and developing entrepreneurs. However, Rob told me that one of the main things he looks for when trying to determine the true value of a company is not how much the company itself is worth, but how much value the company brings to its customers.

What Is the Value Equation?

This is what Rob calls the value equation and he says a lot of companies can’t really accurately answer this question. Many companies speak about what they do well and how their product or service is different, but they aren’t really explaining what their value is. For Rob, he’s looking at how much you can really help your customer, not yourself. Rob shared an example with me regarding the question, how much money can you make or save your customer? He said if a company were to answer him that its product or service could help save it’s customer $800,000 a year because it’s capable of the doing the following things…then he knows he has a good one. He said that is a company he is going to explore deeper.

Do You Know Your Value Equation?

Rob said that he has a lot less interest in the companies that can’t really answer that question or that haven’t take the time to determine what their true value equation is. In fact, the answer to that question is so important to Rob that he told me that “the people that have actually taken the time to explore and work with their customers and know where the customer’s pain is and how much that pain is costing them, that would be the one question I would ask if I only had one question to ask.” Therefore, as far as Rob is concerned, if you want to set yourself apart as an entrepreneur or a startup company then you need to know your value equation. That means you need to know what the real value is that you bring to your customers and how to explain what that value is.

Posted in
SELF EMPLOYED REFINANCING PROBLEMS – WHAT CAN BUSINESS OWNERS EXPECT?

Self Employed Refinancing Problems – What Can Business Owners Expect?

Self Employed Refinancing Problems – What Can Business Owners Expect? By Tristan Hunt Self Employed Borrowers at Greatest Risk of Foreclosure It’s a hot topic. Millions of self-employed borrowers who purchased or refinanced a home in the past 5 years under liberal “stated income” or “no documentation” mortgage programs are finding they cannot qualify to…

The importance of life insurance in estate planning

The Importance of Life Insurance in Estate Planning

Life Insurance for Estate Planning As part of the estate planning process, you may talk to any number of advisors—from lawyers, accountants and trust officers, to financial and retirement planners. These advisors often provide not only valuable services, but also may be in the business of selling investments, annuities and insurance. You will need to…

How to Raise Children That Become Entrepreneurs

How to Raise Children That Become Entrepreneurs

How to Raise Children That Become Entrepreneurs By Lauren Hidden Ever since my kids can remember, I’ve worked from home. Sometimes I have to remind them that I’m not sitting home playing with their toys or eating bon-bons when they’re at the babysitter or at school, but for the most part they “get it”. As…

Transferring Assets to a Second Spouse (and to children from the first)

Transferring Assets to a Second Spouse (and to children from the first)

Transferring Assets to a Second Spouse (and to children from the first) Elizabeth and Thomas Carr (names fictitious), both in their late 60s, each have one child from a prior marriage. During the 30-plus years of their marriage, they each have accumulated an estate of over $5 million. The full $1.5 million credit against estate…