Once, a boy asked his father, “What is the value of life?” The boy’s father gave him a stone and said, “Find out the value of this stone, but don’t sell it.”
The boy took the stone to an fruit seller and asked him what its cost would be. The fruit vendor examined the shiny stone and told the boy, “You can take 12 oranges and give me the stone.” The boy thanked him for his offer but politely told him that his father had asked him not to sell the stone.
The boy then went ahead and met a vegetable seller. “What could the value of this stone be?”, he asked the vegetable seller. The vegetable seller also looked at the shiny stone and offered, “Take one sack of potatoes and give me the stone.” The boy again politely refused the offer to sell it.
Further ahead, he went into a jewelry shop and asked the shop owner for the value of the stone. The jeweler inspected the stone under a lens and said, “I will give you a million for this stone.” As the boy shook his head in refusal, the jeweler negotiated, “Alright! take 2 24 karat gold necklaces, but give me the stone.” The boy explained why he could not sell the stone and came away.
By now, the boy had understood that the stone was no ordinary one and that it was a precious gem. So, he went into a precious gems shop and asked the seller to evaluate the stone. When the precious stone shopkeeper looked at the rare big ruby, he spread out a red cloth, placed the ruby on it, circumambulated it and prostrated in front of it. “Friend, where did you get this priceless ruby from?” he asked and added, “Even if I offer my life, I will not be able to purchase this priceless stone.”
Surprised as well as confused, the boy returned home and reported to his father all that had happened. The boy’s father gave him the following lesson of life: “My son, the answers you got from the fruit vendor, the vegetable seller, the jeweler and the gems expert explain the value of your life. Listen, you may be a precious gem, priceless like the stone that you carried; but … how people value you will be based on so many factors like their problems, pains, dreams and aspirations, their “perceived” benefits from you (i.e., how much they think you will be able to remedy their ills and fulfill their wills), their level of knowledge about you and their trust in your intentions and abilities and their own financial status (particularly their ability to spend). Hence, it is in your own interest that you must find someone who understands your true value. Until you discover such people as would understand your worth, do not sell yourself cheap. Do not dilute and dissipate your time, attention, efforts, emotions and ideas by sharing them with all and sundry.”
Now for entrepreneurs, especially those who sell their own product, there are a few lessons to take away from this story. Let us look at them in the light of the father’s advice to his son, in this story.
How customers value our product will be based on so many factors like
Factor 1 – Their problems, pains and aspirations
In the story, the fruit and vegetable vendors had a problem of disposing of their perishable inventory rapidly. A cold-storage system or an access to a bigger market would have resonated with their needs, wants and dreams. Hence, when the boy showed them the stone, they not only failed to understand it but also found no connection between the stone and their own business pain. Perhaps, finding the shiny stone fanciful, they were considerate enough to offer a dozen oranges and a sack of potatoes, respectively. However, the jeweler and the gem stone seller, related the stone to their own situation. For them, keeping the stone in their stores would boost their store image while fetching them a handsome profit.
Let us relate this to our own sales situation. Initially, we may have created the product for an ‘assumed’ pain of an ‘assumed’ target. As we start testing the market, we are bound to get corrected in our assumptions. We have to start gathering and nurturing leads with an initial set of hypotheses, while remaining open enough to get exposed and knocked hard on our theories. We may validate our initial assumption about a particular target segment for our product or discover an altogether a new audience, who may find a pain or two remedied by what we offer. So, when we go to market with our offering, we must find the right audience to stand before. Otherwise, we face the risk and disappointment of showing up before a crowd, whose pains and dreams have no apparent connection with what we are giving them. For example, if we create a ‘learning and skill development platform’ keeping an organization’s knowledge-management need in mind, we may find students and educational institutions showing more interest (than business organizations) in using the platform for managing their skills gap and skills inventory.
Factor 2 – Their “perceived” benefits from you
In the story, the real worth of the stone had no relation what the vegetable vendor and the fruit seller perceived. Whereas, the precious gem dealer ‘saw’ in the stone an immeasurable value, which may have surpassed even what the boy himself ‘perceived’.
Likewise, as a product creator, we often place a value on our creation, but the prospective buyer is the one who decides what the market worth of the product is. Their ‘problems, pains and aspirations’ along with ‘their idea of how much your product would alleviate their pains or how closer to their dreams, your product could take them’, actually decides what price you can hope to realize from your product.
Factor 3 – Their level of knowledge about you, their trust in our intentions and abilities
When we first engage with prospects, they do not know anything about us or our product. Without that warmth, a cold first-interaction-sale is bound to fail. Without knowing anything about us or what we are trying to help them with, the prospects would dismiss both us and our offerings as either ‘not useful enough’ or ‘of very small value’ that they can afford to let go. Moreover, they may carry a doubt about our ability to deliver and provide support. Hence, it is our obligation to engage with our prospects continuously and educate them about us, about what we offer and also provide references from other happy customers, so as to build the trust and warmth required for the prospects to start accepting us and hence placing a reasonable value on what we offer, without a sense of anxiety or defense.
Factor 4 – Their own financial status
It sounds illogical that our product’s value is influenced, if not determined, by what our prospects can afford to spend. When we create a product and determine its price tag, we have an assumed idea how much benefit our customers would derive from our product. More often than never, our customers use our product in a manner different from how we assumed. So, the value that they place on their ‘idea’ of the product would be different from ours. Sometimes, even a completely orthogonal dimension such as the expenditure budget would decide how much price the customer would be willing to pay. A low budget and hence a low value thought of by the customer, does not actually demean the worth of our product. It may only mean that we may have to break-up or repackage our offering in different ways and chunks, so as to match the customer’s ‘affordability’.
Entrepreneurship is not merely a technical challenge of creating a product and selling it at any price to any one who comes our way. Like the boy in the story, an entrepreneur needs to be mindful enough to know whom to sell the product to so that maximum ‘perceived’ value can be delivered and maximum ‘price’ can be derived.