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Beauty is in the eye of the beholder – or why “value” is subjective

The Dalai Lama opens his present box looks inside and says: “Wow… NOTHING! That’s exactly what I wanted!” If anything would have been in that box it would have been less valuable to him.

Or a personal example: when I moved out from Bucharest to live in a village the buyer of my previous home said in disbelief: “You’re moving to a village?! There is nothing to do there!”… and that was exactly what I wanted: peace and quiet :).

And I am sure you have had the following experience: you notice a person receiving a gift and being grumpy and dismissive about it while you keep thinking: “I would have exploded with happiness right now if I were in his shoes!”

Every single time the object or the experience does not change, but the perceived value of it does.

Because of this subjectiveness, selling to your own wallet is dangerous. You may be thinking: “I would never pay $400 for a meditation app!” but that does not mean that other people would think the same. If meditation solves a big problem in their life, the $400 price tag would feel like a bargain!

In my quest to discover how to quantify value in a way that I can understand it from other people’s point of view I came across this formula from Alex Hormozi:

Value = Dream Outcome x Perceived Likely Hood of Success / (Delay to Outcome x Effort-or-Sacrifice)

A product that fulfills a big dream in a way that is guaranteed and does so instantly and with no effort has infinite value. Think “Aladdin’s Lamp” 🙂

A product that fulfills a small dream with a poor rate of success and that it takes a long time and lots of effort has zero value.

And the mind-blowing part is that each term in the formula is affected by how the buyer perceives it and not if it is objectively true or not.

You may know that meditation is extremely helpful in expanding your awareness, but if the perception of your customers is that it only creates 15 minutes of utter frustration that is what is real for them.

And this is both a blessing and a curse. If you think everyone is like you then it is a curse as no one will see the value as you see it. But if you accept that “beauty is in the eye of the beholder” you will go the extra mile to communicate your offer in a way that your customers can perceive it as valuable.

If you understand the subjective nature of value, it is easy to understand how you can trade a paper clip for a house but most importantly it unlocks your mind to find ways in which you can provide immense value to your customers at a very low cost to you. And now you can create meditation apps that sell for $400 :).

People pay for certainty

“Certainty” is another explanation of why people buy a solution instead of using the free one. 

In many cases, the paid solution comes with some guarantee. And that guarantee can be as simple as: 

“If you can’t figure it out, there is a human being here that will help.“

When you can guarantee an outcome, you can (and you should) charge a premium for that. 

There are lots of free meditation techniques you can find online. But anyone who has tried to silently observe their mind will know that it is not easy. 

If you have a methodology or a way to guide people that can guarantee it will make the process easy, you have a valuable service to offer for those who want to meditate. 

Certainty is also the promise of showing up. Of being there when I said I would. It is the power that consistency and persistence harness. 

For example, knowing that each Monday, a basket of fresh, chemically-free vegetables will wait for me at the door by 9 am is highly valuable to me. Knowing it will be there even if it’s raining, or even if it is a “holiday”, it is a kind of certainty that I value. 

How about making sure your project will succeed? 

Have you ever opened a website that is only half done? Have you ever heard of people starting to write a book and never finishing it? Have you ever started a project only to get stuck halfway? 

What if someone can guarantee that you will finish your project? That is why people hire consultants and coaches. They provide a level of certainty. They are the expert you can rely on or the cheerleader that is always in your corner. 

Paying for certainty is a way to lower your risk. And depending on how much risk your prospects can handle, certainty can be a very valuable proposition.

Chopping wood and building websites

One day I went to visit my old grandfather. When I got there, he asked me if I could help him chop down a tree in the backyard. 

I said “yes,” so he gave me his ax, and off I went to do the job. 

At the time, I was practicing Aikido for a little over one year. Part of that practice was to learn how to correctly hold and swing a sword, have the correct stance, and put maxim power into your cut!

What better time to show off my new skill than to chop down this tree? Sure, the ax was no katana, but the same principles would apply. 

I got into the correct stance, grabbed the ax as if it was a sword, and swung hard at the tree!

Thirty minutes later, my grandpa came to check on my progress, worried that it was taking so long. 

He found me standing next to the tree, struggling to remove the ax that was now stuck into the tree. I looked nothing like a martial artist.

He got close. With one hand, he removed the ax, swung at the tree, and with that single cut, the tree was down. As it should now be obvious, this was a very small tree. 

I was puzzled by this question for a long time: how did he do it so easily at 80+ years old, and why did I fail so miserably despite my confidence in the cutting technique I had just learned? Was Aikido a scam? 

The answer is pretty simple: he had been using an ax to chop down trees for 70 something years. He did not have to think about it; every fiber in his old body knew how to grab the ax, where to hit the tree at what angle, and with how much force. On the other hand, I held an ax for the first time and had zero practice experience. Looking back, I am happy I hit the tree and not my legs.

The same goes with hiring someone to build a website for you. Everyone can learn how to do it from a YouTube video, but it takes time and practice to see all the nuances and get it right from the first try. And what do you value more? Someone who is chopping for days at your site working “very hard?” Or someone who gets it done from the first swing?