What is Value?

How does one measure the worth of something, or someone?

A Day at the Auction

My father and I recently took my boys down to the Barrett-Jackson auction in Scottsdale, AZ. It was bonding time for the men of my family. We like this annual ritual because it has something for everyone. My dad likes old cars and there’s a strong pull of nostalgia when he identifies something from his youth. He will often tell stories of the many cars he’s owned or encountered in his life. My favorite is the story of his SS 396 Chevelle with the redline tires. It was the fastest car in town until his fateful encounter with a guy in a Plymouth Roadrunner. My boys get their standard dose of Pixar vehicles and Transformers. Occasionally we find fancy customs with Autobot or Deceptikon logos and we wonder out loud whether or not it’s an actual robot from Cybertron. For me, I’m still under the delusion that I can own one of these someday. Maybe a Shelby Cobra or 1957 ‘Vette. I’m a particular fan of coach doors, so I wouldn’t mind picking up an old Lincoln Continental convertible. If I really hold on to my pennies, I might get a custom job built from scratch with all the features I want. Fascination with cars runs in the family.

As we walked the rows of shiny bespoke dream machines, we would remark to each other how impressive the green fastback from Bullitt was or wrinkle our brows at why someone would drop a supercharger into a ’75 Coupe de Ville. We saw a Hummer with 6 wheels and a bright, lime green Studebaker. It was an embarrassment of riches.

The subtle theme of the show was Ford vs Ferrari, the movie with Matt Damon and Christian Bale. It was playing on the big screen tvs all over the facility. There were a bunch of Ford Mach 1s inspired by the 1966 le Mans race.  

It was kids day at the auction so there was no active bidding. The preview tents were not completely full yet and staff was still setting up the auction platform. When we walked by the stage, my 8-year-old pointed to it and asked

“what’s that?”

“That’s where they present cars for auction.”

That, of course, led to a discussion of what an auction is and why it exists. To the mind of an 8-year-old boy, the only thing a $10 bill is good for is to beg mom to go to Target and get a new Lego set or a Nerf gun. So, it was interesting to watch his little gears turning for why someone would throw down tens of thousands of dollars for a 77 Trans Am from Smokey and the Bandit.

Money by itself is useless, it’s just numbers on a spreadsheet or rectangles of green, clothlike paper with dead people’s faces on it. The reason we gather money is to purchase things of meaning for us – food, clothing, shelter, material possessions.

That, in turn, got my wheels spinning about the concept of Value. What is it?

How Can Value be Defined?

It’s not a very complex concept to understand, but it is near impossible to measure in an objective sense.

val·ue valyo?o [noun] - the regard that something is held to deserve; the importance, worth, or usefulness of something. See also: merit, utility

The amount of money you are willing to give or how much debt you are willing to take on can be good measures of Value to you; it is entirely personal and subjective. If you asked two other people what something is valued at, you will almost always get two different answers. It is a double-edged sword: you and I agree that this thing we are discussing is important to us; others will have zero interest in it, or worse, it carries negative value - they would pay money to destroy it. Auctions are a great way to understand the human underpinnings of Value.

But it is not a universal system of measurement. There is no objective reality when it comes to Value. Value is a consensual hallucination between two or more humans.

 Value is in the Eye of the Beholder

I personally have no interest in sneakers, but according to Bloomberg Businessweek, they are now an asset class. Sneakerheads are snatching up Air Jordans and other slammin kicks because of their enormous perceived value. I also cannot see myself ever paying $3,000 for a bicycle; but that is the going rate for a good bike in articles in men’s magazines. What in the world is a Non-Fungible Token? How does Bitcoin  and Ethereum work?

Marketing Tells Stories About Value

My wife and I are Marketers. We tell stories for a living. You are reading one of mine right now.

As marketers, we are charged with telling stories about our products and services that are designed to convince you of their enormous Value. Our goal is to get you to hand over your money for these products and services. If we do our job well, you will buy and you will walk away happy, having found the value you were looking for. If we do our jobs really well, you will compete for the opportunity to buy our stuff. Think of how hard it was to buy toilet paper a year ago. Good luck trying to find a Sony PS5 around Christmas time. Value is based on a really good story we tell ourselves. 

Value in the Business World

In business, you will struggle to get others to appreciate your value. You may hear terms like Net Worth thrown around. Guys like Jeff Bezos and Elon Musk are the richest people in the world as measured by Value. Elon even goes so far as to say, “you aren’t paid for your time. You are paid for your value.” He also says, “You should be paid relative to the size of the problems you solve.”

This makes sense from a certain perspective. Taking an order for a Big Mac at one of dozens of branded restaurants in a geographical area is not a huge problem to solve. Hence, the value is worth a wage listed as Minimum.

If you want to make more money, this logic dictates that you need to solve bigger problems. You need to provide more Value. But here’s the rub: your value is subjective based on who is performing the Valuation.

You need to solve the problem for the person you want money from. 

Value is Determined by the Person with the Money

Forget what you think you know about Value. It’s meaningless. It’s a magic trick.

Your task is to convince the person evaluating you that you provide more Value than they think. You solve their problem better than anything or anyone else.

Focus on the person in front of you. Nothing else matters.

This applies to the workplace, customers, politicians, and personal relationships. Everything needs to be shifted to a perspective where you tell a great story about why what you offer is of immense value to the person in front of you.

Ultimately there will be people that do not accept your value. Avoid these people. Spend your time finding the people that see your value OR are willing to be told a story of your worth. Don’t stay in a place where your boss doesn’t believe in you. Stop chasing customers who don’t want what you are selling. If a politician does not value your input or represent your beliefs, fire them in the next election.

Search for people who have the potential to see your value. Invest in them. Invest in customers who pay full price. Invest in a boss that genuinely cares about you. Invest in personal relationships with friends and loved ones. They offer the best return. They see your Value.

Your Definition of Value is About to Change

We spent the last year on lockdown because a little organism 1/1000th the size of a human hair had us re-evaluating everything. As of this writing, 1 in 4 people have received at least one vaccine dose, including myself. Things are going to come roaring back very quickly. New opportunities are going to emerge for everyone. A car from Barrett-Jackson may take on new meaning, since we will probably drive less. We probably won’t value things like commercial real estate, commuting, and business travel as much anymore now that we have Zoom. We probably won’t value things like grocery shopping anymore now that we have Instacart.

You will need to re-evaluate yourself.  What gives you meaning?

It’s time to understand your Value. It’s time to find others who do, too.