Tier 2
What Is Value?
Value is time saved, risk reduced, or outcomes made predictable. A clean definition that explains why markets pay what they pay.
Answer
What Is Value?
Direct answer: Value is the reduction of cost on the path to a desired outcome. The cost can be time, uncertainty, coordination, or risk. Mechanism: Markets pay for value because value increases predictability, and predictability reduces the buyer’s downside. Implication: If you want to be paid more, stop describing effort and start describing cost removed for the buyer.
Definitions
- Value: Cost removed from the path to an outcome.
- Outcome: The state the buyer wants to reach.
- Friction: Anything that makes the outcome harder to reach.
- Certainty: Probability of the outcome being achieved.
The mechanism (why this works)
- Buyers care about outcomes, not your internal process.
- Value appears when an outcome becomes easier, faster, safer, or more likely.
- Therefore, money rewards what stabilizes outcomes and reduces uncertainty.
Where this breaks down
- Value depends on context and constraints.
- Some outcomes are priced poorly because incentives are misaligned.
- Value can be invisible if it cannot be communicated and distributed.
Practical use (evergreen)
If you understand this model, you should:
- Stop optimizing: busywork that does not change an outcome
- Start measuring: before/after time, risk, and certainty for one buyer type
- Redesign: offers into small promises that can be proven
Related pages
Summary
Value is cost removed on the path to an outcome. Markets pay for predictability, not exertion. Make value legible through clarity, proof, and distribution.