Value Creation

Engineering Economics and

Entrepreneurship
Market Evaluation
Part III
 Human desire
What people want

Priority Method
Which one first How to satisfy

Maslow’s
Core Human
Hierarcy of ERG Theory
Drives
Needs
Abraham Maslow Clayton Alderfer Paul Lawrence
Maslow’s Self-Actualization

Hierarcy of Needs
Priority of human desires Esteem

Love

Safety

Physiology
Maslow’s Hierarchy of Needs

Self Actualization Personal growth

Esteem Status, recognition, freedom

Love Family, friends, connections

Safety Employment, health, resources

Physiology Water, food, shelter, clothing
ERG Theory

Existence Relatedness Growth

• Physiology • Love • Self actualization
• Safety • Esteem
 • Shopping
mall
Acquire
• Consulting
companies

• Restaurant
Core Human Bond • Dating
Drives services

Method to satisfy human desires • Book

publisher
Learn
• Training
workshop

• Insurance
Defend
• Legal services

• Movies
Feel
• Games
Evaluate a Market
• How badly • How many • Highest price • Cost to • Cost to create
people people will people will acquire and deliver
want/need purchase pay customer or value
generate sale
Cost of
Pricing Cost of Value
Urgency Market Size Customer
Potential Delivery
Acquisition

• How unique • How quickly • How much to • Potential • Additional

is the offer to create invest utility or work to
• How easy product or secondary continue
others copy service offers selling
Uniqueness of Speed to Up-Front Evergreen
Upsell Potential
Offer Market Investment Potential
Evaluate a Market
No. Category Low High Score
1. Urgency Movie rental Concert 0-10
2. Market Size Hunting equipment Hospital 0-10
3. Pricing Potential Lollipops Aircraft 0-10
4. Cost of Customer Acquisition Restaurant Contractors 10-0
5. Cost of Value Delivery Software/App Factory 10-0
6. Uniqueness of Offer Hair salon Certified Inspection 0-10
7. Speed to Market Housekeeper Bank 10-0
8. Up-Front Investment Juice stand Mining 10-0
9. Upsell Potential Jewelry Laptop 0-10
10. Evergreen Potential Consulting business Book publishing 0-10
 <50 50-75 >75
Move on to Has Promising
Evaluate a Market another potential idea
idea Huge Full speed
investment ahead
of energy
and
resources
Forms of Value
Part IV
Twelve Forms of Value

Product Agency
Service Audience Aggregation
Shared Resource Loan
Subscription Option
Resale Insurance
Lease Capital
1. Product

Inexpensive production Book

Acceptable quality Car
Tangible item Sell high Computer
Sell a lot Food
Enough inventory Medication
2. Service

Haircut
Skill or ability
Assist in exchange Doctor
Provide high quality
for fee Consultant
Attract customers
Designer
3. Shared Resource

Asset that people

want Gym
Durable asset
Many users Museum
Used by many people
Maintenance and Zoo
improvement
4. Subscription

Provide value at a Internet

Predefined benefits regular basis provider
Recurring fee Attract and retain Streaming
subscribers service
5. Resale

Inexpensive purchase
Supermarket
Resale product at Good condition
higher price Book store
Find purchasers
Grocery store
Sell high
6. Lease

Asset that people

Use another’s want Car rental
asset at a fee Favorable terms House rent
Protect your asset
7. Agency

Find a seller House agency

Market and sell Establish contract Publisher
another’s asset Find buyer agency
Negotiate Sports agency
8. Audience Aggregation

Identify a group
Attract the group’s
Collect and sell attention Magazine
audience Websites
Find third parties
Sell access
9. Loan

Have money
Let people borrow Find borrower Mortgages
money → interest Set interest Auto loans
Insurance
10. Option

Identify action Movie

Predefined action tickets
Offer the rights
for certain time Down
Enforce deadline Payment
11. Insurance

Risk transfer House

agreement insurance
Risk transfer Estimate the risk Car insurance
Purchaser → Seller Collect premiums Health
Pay legitimate claims insurance
12. Capital

Have money
Find promising Stock market
Ownership stake in a business
business Venture
Estimate the business capitalist
Negotiate ownership
Modularity

Magazine Travel Agency Movie

• Audience • Shared Resource Theaters
Aggregation • Insurance • Shared Resource
• Subscription • Option • Option
• Products
Bundling and Unbundling
Bundling Unbundling

A B Sub A

Product
C Sub B
Sub C
New Product
Buy 1 Get 1 Single Album
 Measure Watch

Iteration Cycle
Nobody—no matter how smart or
talented they are—gets it right the Act Ideate
first time.

Which Guess
Homework

Cari sebuah ide bisnis

Deskripsikan ide bisnis dalam satu paragraf

Market research (ERG Theory, Core Human Drives)

Evaluasi marketnya

Tentukan bentuk value dari bisnis tersebut, dan metode pengembangan untuk setiap bentuk value
Thank you!
Rio Natanael Wijaya
rion002@brin.go.id
+62-817-0200-950