In trade, the concept of value is widely used by individuals and organizations to acquire, compare or recommend assets. Unfortunately, the importance of value and how it affects transaction decisions in marketplaces is rarely discussed outside of highly specialized and concentrated groups like product developers and pricing specialists. This simple oversight on such a vital concept creates inefficient markets and relationships with sellers losing most.
While overlooked by many, the importance of value creation and more specifically its effect on trade hasn’t been lost on all. In fact, the upper echelons of academia and the private sector, have attempted to explain the evolution of economic value through a commonly accepted tool known as the business model. This model covers 3 areas including: (1) value creation (2) value capture and (3) value delivery. While the business model is an incredibly effective tool and widely accepted, there is an opportunity to improve it while better helping sellers worldwide.
Valueflow, a stage based view of value creation for better product development was created by Dezmon Landers to pick up where the business model ends. He believes there are 2 stages of economic value that go uncaptured in the traditional business model.
The first of those stages is that of value identification. Before something can be captured (which is where the business model starts), it must be identified. For example, in order for the air conditioner to be invented, a set of circumstances (also known as opportunity) had to exist, be identified, studied and reviewed before an appropriate invention could fill the void.
Second, is that of value release. A buyer’s ability to separate from a product or service when value isn’t anticipated or no longer realized. People change and so do their needs, wants and desires and this is why the value release stage should be considered. It is important because it forces sellers to focus on a stage where they no longer get anything in return. Valueflow also suggests that they excel in this stage to protect against potential risks of damaging buyer relationships they’ve worked hard to build.
Valueflow was discovered as a byproduct to a greater study of 1000+ business structures, commonalities and patterns in efforts to start simplifying entrepreneurship education. To learn more about the concept, please visit: https://www.usevalueflow.org.