Understanding Value

Dennis J. McWherter, Jr. bio photo By Dennis J. McWherter, Jr. Comment

Once upon a time, as a naive undergraduate, I was coerced into believing that ground-breaking scientific contributions are the only true way to generate value. For quite sometime I truly believed this. I would see a new iPhone or Android app, or yet another social networking site and discount it stating, €œyeah yeah€¦ Any twelve year-old with a spare week and 30 cans of mountain dew could have done that€¦€ While this fact may or may not be true, it is beside the point. The point is that these things are exactly the kinds of innovations our society needs. By disregarding the value that these services provide to people around them, I had been depriving myself of a very powerful tool to actually aiding society. As I said, I previously only considered ground-breaking technological advancements as value-producing ideas; being creative and innovative in any other way was simply not interesting.

As I have read this piece, I have become particularly more aware of the appropriation of value. Value is not necessarily created through the difficulty or novelty of a task nor is it created from the virtue of being busy in the first place. On the contrary, value is largely independent of these things (though there may be some correlation for the extraordinarily innovative). As described in the referenced work above, value is created through utility (perceived or otherwise) to those we seek to serve. In practice, however, our services are judged in many different facets. In a perfect world, having a job for the sake of having a job would be an antiquated€“ if not entirely bizarre€“ idea. Instead, people would work to create more value for more people and be satisfied working this way (though the prospect of shorter-term jobs would be higher). In such an environment, products and services would continue to grow, people would continue to prosper, and€“ I suggest€“ people would find a generally higher satisfaction with their positions in life. Though this is purely speculative, of course, such a world does not currently– and likely will not– exist. On the other hand, that does not mean we are powerless. What I€™m getting at here is the simple cliche, €œbe the change you want to be in the world.€ Don€™t throw in the towel simply because your ideals won€™t necessarily come to fruition in your lifetime.

Instead, we are currently left in a world with an odd mixture. People still exist with strong power which allows them to act as major players due to some granted privilege. There is nothing we can do about that and being scornful or upset about it will not do us any good either. Contrarily, we also live in a world that has seen, on several occasions, many major successes for the innovative entrepreneurs. Take Google or Facebook, for example. Though they both were late to the markets in which they now largely dominate, they provided some service that people desired and they provided it well and better than their competitors. Since their competitors did not fully respect them, they were able to gain substantial footholds in their markets by focusing on the customer. What€™s more, these companies maintained healthy relationships with their customers to continually improve their product. As you can see, by focusing on value these companies succeeded in their missions. Of course, these are only two examples and I admit that most startups do fail. However, this failure is likely due to one of two things: (1) they are not producing sufficient value for the demand at the time to be relevant or (i.e. irrelevant) (2) the relationships among founders and their peers, investors, employees, etc. are not well-fostered. Avoiding these two major mistakes can be a real game changer for those who truly wish to add real value to the world.

As you can see, value does not strictly signify strong technical advance or achievement. In fact, such an advance may not actually be useful at the time of its discovery. Consider Low-Density Parity Check (LDPC) codes discovered by Robert Gallager at MIT in the 1960€™s. At the time they were a novel part of his Ph.D. thesis, but were largely unused until 1990€™s when underlying computer hardware became powerful enough to perform the mathematical operations. To date, these are the most powerful error-correcting codes. Thus, it is clear that technological advances alone are insufficient for generating value. Though they can often fuel and improve value, technological advance is only one piece of the puzzle. This comes as a relief to many of us. If this was truly the only way to generate value, then the vast majority of people would be genuinely useless to society and only the exceptionally brilliant could do anything. However, we thankfully observe that this is certainly not the case and that everyone, in fact, can add value. Understanding the needs of people around us as well as how to solve their problems is key to what value truly is.

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