What is "providing value"?

[rohan]

Hi,

I have a major doubt and am looking for some perspective -

There are a lot of concerns about the way all of us are not living harmoniously with nature and have severely unsustainable lifestyles. Advertising and marketing are areas which are focussed on generating "need" to sell a product or service.

If people, don't really "need" anything, can be self-sufficient with minimal amount of "materials" and derive happiness, sustenance and fulfillment from within rather than depending on external products and services, then why will anybody buy anything?

Doesn't it seem that in order to sell your product you need to create a sense of lack in people and promise to fulfill it? So when we talk about "providing value", it seems to be an act of conning and duping people.

I am not being critical, I am simply trying to figure this out in my head and I want a different perspective on this - on what it means to "provide value".

[Manomanman]

Mother nature provides all the physical deprivation necessary for an economy to function:

hunger, lack of sex, lack of space, all manner of disease, etc. etc. etc.

Value is the alleviation of these pains, and also, the stimulation of the mind through entertainment.

[SomeRandomGuy]

Originally Posted by rohan

Doesn't it seem that in order to sell your product you need to create a sense of lack in people and promise to fulfill it? So when we talk about "providing value", it seems to be an act of conning and duping people.

It is the consumerist mindset. In order to sell something you have to either convince people they need it, or take advantage of an existing feeling of need created by someone else. There are various examples throughout history that show the negative impact this can have on a society. Take the Cherokee, for example. They lived a happy, self-sustaining life for generations. Once the European traders made contact, and began crafting that desire for goods only they could provide the Cherokee became reliant on those goods within a few years. Almost everyone in the developed world is reliant on consumer goods, because we have allowed those who sell products to turn us all into consumers.

[luckyJTF7s]

I couldn't agree more, rohan.

You know, as an ex-starving artist, you learn all the tricks, and I still live that way, now... Freecycle, buying at thrift shops, 2ndhand everything eBay, Craigslist, scavenging sidewalks on garbage day... endless. If I need a staplegun or a cauker, I start knocking on doors in my condo and borrow one. I'm not shy. Condo has a building-wide bookshelf for CD, video game, book and magazine swapping. Probably 8 people end up reading my New Yorker subscription... vintage. OMG vintage clothes and jewelry have quality you can't even find at any price retail these days, and they go for 20% (dressress, bracelet:bracelet) of their modern retail counterparts. Why on earth would I buy gap when I can get a nice vintage Yves St Laurent number for the same price? container gardening - tomatoes, lettuce etc - on the balconies is big here now, getting commonplace, people swap varietal names and talk yield... I would never buy a new vehicle - dat crazy...

I can't remember the last thing I bought retail, apart from groceries, no lie. I've media fasted for ages, so if you're not in my email IN, your advertising isn't hitting me... my eyeballs are scarce commodities

I'm certain this lifestyle will become much more commonplace, just because secondhand is so green. The green trend will drive it first rather than the monetary savings, I think... at which point, I suppose the secondhand prices go up, but starting at 20 cents on the dollar??? they'll be hypercompetitive vis-a-vis retail for ages.

... but yes, you are so right!!! GDPs aren't all services, they are goods. Doubtless this stuff only starts to make a real dent in 2025, not next year.... but uh yeah hope photovoltaics takes over from The Limited and Bed Bath and Beyond or it will start to have an effect on western economies at some point, I imagine...

[AaronA]

Originally Posted by luckyJTF7s

I couldn't agree more, rohan.
... If I need a staplegun or a cauker, I start knocking on doors in my condo and borrow one...Probably 8 people end up reading my New Yorker subscription...

See, to me, these are all demonstrations of what it means to provide value. The staplegun probably cost 20 bucks, plus the cost of staples. It provides much more than 20 dollars in value to the people that use it. Passing the staple gun around just demonstrates how valuable that it is. That doesn't mean everybody needed their own staple gun, since as long as the one gun doesn't break, then it's still providing value. Same thing with the New Yorker. It took time to produce, and that production was worthwhile. That's all providing value means. We as a society can each try to individually produce everything for ourselves, or produce things for one another by specializing and exchanging. Living harmoniously with nature is a nice idea, but even non-Western cultures involved exchange. They might be/have been more voluntary than ours, say as in gift cultures, but there was still exchange present.

And people do need plenty. We might be able to greatly cut down on our disposable culture, but that doesn't mean that humans, like other animals, still don't have needs.

[Manomanman]

Originally Posted by rohan

Doesn't it seem that in order to sell your product you need to create a sense of lack in people and promise to fulfill it? So when we talk about "providing value", it seems to be an act of conning and duping people.

I am not being critical, I am simply trying to figure this out in my head and I want a different perspective on this - on what it means to "provide value".

Am I conning somebody by saying, "Hey man, you're hungry, I've got this juicy apple that will TOTALLY get rid of that hunger."

You've got to outgrow these adolescent beliefs about the free market if you want to make money.

[rohan]

There is need, and there's greed.
There's enough and there's excess.

I guess we need to find the distinction between the two.
Still looking for more perspectives on this.

Thank you guys!

[Manomanman]

Originally Posted by rohan

There is need, and there's greed.
There's enough and there's excess.

I guess we need to find the distinction between the two.
Still looking for more perspectives on this.

Thank you guys!

Gambling, make money online (i.e. get rich quick), playing the lottery are all greed.

Everything else I can think of is need.

Need makes up 99.999% of the money spent.

[givejonadollar]

Originally Posted by rohan

There is need, and there's greed.
There's enough and there's excess.

I guess we need to find the distinction between the two.
Still looking for more perspectives on this.

Thank you guys!

Greed is good. Greed creates wealth for everyone.

Do you think anything great could have ever been invented in the world if not for rational self interest?

Value may be subjective. Mark Twain used the example of a hat. To summarize, you want the hat badly. You save up. You buy it. Then, your favorite girl in the world insults the hat. The hat loses all value.

However, providing value is the essence of being a good contributor and living a happy life.

Good luck.

[SomeRandomGuy]

Originally Posted by givejonadollar

Greed is good. Greed creates wealth for everyone.

From this statement I assume that you believe that wealth is good? Why? What does wealth provide us, other than the ability to buy more products that others have convinced us that we need? There is little that we actually need to survive, yet we tend to rely on material goods for our happiness. Is that because we really need those things to be happy? Or, like the OP suggests, is it because someone else, someone trying to make money from us, has told us that we need those things to be happy?

I'm reminded of this story: What Will My Reward Be?

[jacare]

Originally Posted by rohan

Hi,

I have a major doubt and am looking for some perspective -

If people, don't really "need" anything, can be self-sufficient with minimal amount of "materials" and derive happiness, sustenance and fulfillment from within rather than depending on external products and services, then why will anybody buy anything?

Why does the Rolex company exist? Because it tells time better than a Timex?

In business you know right away if you are fulfilling a need because people buy it. If you have to work too hard to sell it then you have to manufacture the need and that is a different proposition.

But 10 years ago nobody needed an iPad or a SmartPhone.

[Manomanman]

Originally Posted by SomeRandomGuy

From this statement I assume that you believe that wealth is good? Why? What does wealth provide us, other than the ability to buy more products that others have convinced us that we need?

Profit is the reward for entrepreneurs to produce goods and services more efficiently.

Because so few people are motivated by profit, there will therefore be few entrepreneurs in the world.

Most people are motivated by social approval rather than profit.

[D Castle]

Gambling, make money online (i.e. get rich quick), playing the lottery are all greed.

Everything else I can think of is need.

Need makes up 99.999% of the money spent.

Need makes up 99.999% of money spent. That is an extreme position.

In my experience and with the money that I earn and spend I can safely say that I do not spend 99.999% on things that I need. There are many things that I do not need and do not buy. And conversely there are many things that I do not need that I buy.

There should be a distinction drawn between needs and wants.

There are surprisingly few things that we need, as you have pointed out and also that Steve outlined in his book as well as many other philosophers in the past:

Food
Shelter
Survival

These are the fundamental needs. Everything else can be argued as being "wants." Wants are not intrinsically bad. Let's be honest - we all have wants! Each of us have different wants and this is one of the reasons there are so many things and services available and offered.

This does have a downside which I think the original poster was pointing out. I think the problem originates with brands that aim to create cultures. We must understand that people who make things or offer services aim to establish brand loyalty for the main reason of ensuring as many returning customers as possible. Taking this one step further, this becomes exploitative on the consumer's behalf when companies begin to create cultures that want what they have. On one hand its ingenious and effective marketing. On the other hand its manipulative and creates the "keeping up with the jones" mentality. This is nothing new, but I thought it was relevant to the issue at hand.

There is an upside to this, though. In our economic system, capitalism sort of employs a natural selection and the real items of value eventually remain while the disposable and cheap thrills eventually die out.

In my opinion, it is possible to create value without intentionally trying to create consumers who become "addicted" to what you are offering. Although, I'm sure many entrepreneurs would consider this counter-intuitive and unwise. I believe someone who can sell a real need and naturally attract returning customers is far more successful. Not necessarily in terms of net profit, but in terms of providing REAL VALUE to society. See Steve's Article: How to Create Real Value

We must be conscious of the things we consume. The main question I would post is: Can entities who exploit consumers and create unnecessary wants aimed at sub-cultures be stamped out? How?

[Manomanman]

How To Make Money Online, Part 2: Why People Buy

[givejonadollar]

Originally Posted by SomeRandomGuy

From this statement I assume that you believe that wealth is good? Why? What does wealth provide us, other than the ability to buy more products that others have convinced us that we need? There is little that we actually need to survive, yet we tend to rely on material goods for our happiness. Is that because we really need those things to be happy? Or, like the OP suggests, is it because someone else, someone trying to make money from us, has told us that we need those things to be happy?

I'm reminded of this story: What Will My Reward Be?

The posters after you did a wonderful job of explaining but I will go a bit further.

Essentially, what people of my mindset believe, is that by creating wealth, with a selfish motive, you end up helping more people through the wealth you create, then you ever could have done by simply giving your time to anyone and everyone willy nilly.

As such, greed is good.

That will be $1 please.

[Brutha]

Essentially, what people of my mindset believe, is that by creating wealth, with a selfish motive, you end up helping more people through the wealth you create, then you ever could have done by simply giving your time to anyone and everyone willy nilly.

Thinking that striving for wealth is always good is naive.
Sometimes it causes people to create value and sometimes it drives them to play zero sum or negative sum games.

[aiyori]

Value is an abstract concept. But we know it when we see it.

Value must involve changes, e.g. knowledge makes people smarter, entertainment makes people happier, a creative invention makes our lives easier.

If a piece of knowledge cannot make people smarter, then it is rubbish. A boring movie is not value. And a solar powered flashlight is not value.

[Acting Like Godot]

Originally Posted by aiyori

And a solar powered flashlight is not value.

It could be. It depends on how successfully it stores energy, while it is being exposed to sunlight. If it stores a lot of energy, it could be used for a long time in darkness.

[newmark]

Originally Posted by aiyori

A boring movie is not value.

A boring movie to you will be an interesting movie to someone else - and so provide value for them.

[ar81]

Producing value is about making physical transformations to make something more useful for a customer. Cleaning a room in a hotel makes the room more useful than a dirty room. Providing phone support for printers makes the printer to be remotely transformed so it works. Repairing a car is a physical transformation that makes a piece of junk to be useful again. Manufacturing jeans makes fabric to be more useful.

Notice that price and value are different. Price is what you pay, value is what you get.