Entrepreneurial Valuation

In this book the author lays out his research on the theory of value and how it matters for entrepreneurs. The author argues that value is not created and entrepreneurs get misled by the still-prevailing value creation theories into overconfidence and prediction when they should be paying far more attention to their prospective customers and learning from them. The truth is, consumers don't know what they should want. What is valuable to them is learned over time through a process of consumption experience and innovation. Preferences are predictions of future value, generally formed from what has been valuable to them in the past. In fact, research suggests that it is quite common that consumers misattribute value to the wrong sources, which causes them to want ineffective things in the future. This presents some important challenges to entrepreneurs as they look to provide new and better value experiences for customers. The purpose of this book is to teach entrepreneurs the right way to understand value and to leverage that understanding toward an entrepreneurial method that stands a much higher chance of success. The book begins by dismantling erroneous value theories and replacing them with a philosophically sound understanding of subjective value, where the author teaches the entrepreneur to stop trying to 'create' value and to instead understand their goal as facilitating value experiences for their customers. He then steps through the value learning process to explain to entrepreneurs how their prospective customers learn what to want and, similarly, how they, the entrepreneurs, can better learn (from consumers and other sources) what to produce. The author shows how this process is far more fallible and difficult than entrepreneurs are often led to believe, which can lead to a false over-optimism. He also gives entrepreneurs the knowledge and tools to avoid the largest and most common pitfalls and to ensure, to the largest extent possible, that they will land on a solution that consumers will truly value.