The only lasting business model
There are many different kinds of businesses and many models they use to try to make money. But there is only one business model that will survive and thrive over time. It’s the model of creating real value for customers.
Obviously there are more ways of making money, especially on a short term basis. Take a successful concept and copy it and milk it until there’s no value left. Promise people the world, but don’t deliver. Con and deceive them, and be gone when they find out. You’ll make money, sure (you may get arrested), but you’ll never build a lasting business on these models. That’s because you’re sucking value out of things, instead of creating value and giving it to others. These are models of destruction, not models of creation.
The only lasting way of making money is by creating value for others. Creation…not destruction!
Subjective profit
People want to make good deals. They want value for money, and they want to get more value than they think their money is worth. A good deal is a deal that gives you a subjective profit. If you feel that you’ve gotten more value than you paid for (in money), you will feel you’ve made a subjective profit. You’re better off after the deal, than you were before the deal.
Although this may feel like a psychological trick to make people feel good about a bad deal, it in fact is not. People differ, and as such have a different appreciation of value. Something that’s very valuable for one person, may be substantially worth less to an other. The difference needn’t be great for people to experience making a good deal, and in fact actually making a good deal. Buying a blu-ray player won by a person that doesn’t own an HDTV, for a discount compared to the retail price is a good deal for both (provided you do own an HDTV).
The same goes for the age-old scarcity vs. abundance mindset. To the shepherd with a hundred thirsty sheep, the woman that owns a well but no warm clothes is rich. He would happily trade a sheep for water for his herd. For both this is a good deal. The shepherd has a herd of 99 that will survive and the woman has a sheep that will provide wool for warmth. The water is more valuable to the shepherd than the one sheep. For the woman the one sheep is more valuable than the water consumed by the herd. Both are better off, so both make a subjective profit from this deal.
Even when combining talents this mindset still stands. The awesome guitar-player with the mediocre voice is better of working together with the awesome singer with mediocre instrument skills, than both are competing against each other. In competition they make mediocre music and won’t feel awesome, in cooperation, they make awesome music and feel great. And they’ll provide awesome music to the world, instead of mediocre music.
Not the everyday make money online scam artist
A lot of the make money online websites out there, are not based on providing real value. There are more variations to this theme than I could ever make up. I know I’ve fallen for some of them, and it sucks. People know when they’re getting conned. But to a lot of these site owners, that’s not a big deal, because they already have your cash! After that: screw you! They don’t care about you, or your money making abilities. They already cooking up some other scheme of getting your cash.
That’s not how I want to earn a living. I’m all in favor of the value creation model. I believe that it’s the only lasting way of making a living. I hadn’t updated Scraping Pennies, because it left me feeling like one of those make money online scam artists. That’s just not congruent with who I am, so I’m transforming this blog into an outlet for my thoughts on creating businesses based on the value creation model. It’s the only model that works. It’s also the hardest to set up, and the hardest to maintain. Yet it’s the most gratifying model of all.
Creation!
Not destruction.
2 Pennies' Worth Of Thoughts Here!
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Beautifully said. And I don’t know if it’s just me, but I think this is looking to be a great time for a lot of people to find some value to contribute, and accept good pay for providing it. The unemployment rate is only high because there is getting to be a reduced demand for actual hands working on things. This frees people up to find things they truly enjoy doing instead! We don’t need to be cogs in machines if there are cogs that can do that part instead.
So let’s all get creating!
.-= Qrystal´s last blog ..My Teaching Philosophy =-.
I agree that it’s a time full of opportunity for those that have that mindset already. More people will get “pushed” into self employment, a step that they might not have taken otherwise.
If you’re not blessed with the mindset of creation and opportunity, this is the time to read about it, educate yourself in it and put it into practice. Even if you shouldn’t need it to get a new job, or another source of income, it’s a valuable mindset that will bring you much much more than being in the mindset of dependance and problems.