Lesson 13a: Price vs Value

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Right, as you can see, we got some snow. A little bit. Maybe you can't see.

It's a light dusting. Light little dusting down here. So I got like snow on my feet out here.

Shit. All right. Price versus value.

Let's talk about it. Let's get into it. Let's start with an old story.

Picasso, the famous artist. You may have heard this one, but Picasso was in a cafe and he was scribbling on a little piece of paper or napkin and drew something, drew something pretty neat. And he was going to throw it away.

And I think a woman came up to him or a man who knows, it doesn't really matter. And like tried to grab it like out of the garbage. And he's like, no, you can't have it.

It'll cost you $60,000. She goes, well, what do you mean? Like you were just going to throw it away. And he's like, yeah, but the value is worth $60,000 today.

And given time, she probably should have taken that deal. But the point was that and she was like, but it only took you like a minute to draw. And he's like, yeah, it didn't take me a minute.

It took me 60 years, 30 years, all the way up until this point to draw that thing. So it's an off-sited example, but it matters quite a bit because it's chilly out here. It matters.

It matters because value is very different than price. Value doesn't change as often as price. And oftentimes value, if it really is valuable and have intrinsic value gets more valuable over time to the point where you can't even see how much more valuable it will become.

Take vintage watches, for example, what used to cost $1,500, maybe back in the day in the seventies or eighties today is over a hundred thousand dollars. In some cases, over a million dollars for something that people didn't even want. And that just shows you like sometimes the test of time showcases value more than wherever the trend cycle is.

So when you're talking about like your own product or service and people try to beat you up on price, I think you really, before you even get to price, you just have to establish what you think the present value of that future cash flows present value is in that object, in that digital thing, in that experience that you're providing. And so I'll give you an example. Take minimum wage in the United States, like maybe around $7 right now.

When I was a kid, it was like $5.25 and I was making minimum wage. My first job, collecting carts in a grocery store and pushing like maybe only five at a time up a hill in the snow, both ways, not both ways, just one way. It was uphill, sucked.

It wasn't fun. My first paycheck was like 88 bucks. Not cool.

But here we are. So imagine that $5.25, $7, whatever minimum wages, times 2080 hours in a year, times 30 years. That's and you did that thing over and over again, you became best in the world at that because you found nuance, you found capabilities, you'd been through every possible experience, almost the black swan events, the ups, the downs, and you could very quickly put a masterclass together on how to collect carts or whatever the thing is.

And if you multiply that out, like seven bucks times 2080 times 30 years, you're going to get millions of dollars. So the price point for you to deliver a talk, let's say deliver a service, deliver a product that solves that problem. That's worth millions of dollars.

Just that alone. It might astound people. Now, the question is really, is someone going to pay that price? So like, let's take it up a notch to the people that, you know, we're sort of supposed experts in the world.

Let's take like a McKinsey consultant. So McKinsey is like one of the sort of highest respected brands. They are the Pixar, the Disney, the Apple of let's say management strategy consulting, one of the OGs.

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And so sometimes like even like a law firm, right? Like your senior partners may charge thousand bucks an hour, a couple thousand bucks an hour. Let's do that same math times 2080 times 30 years. You're upwards of $60 million, $100 million is what that's worth.

When you have that person sit down with you, a hundred million bucks. Now who's going to pay a hundred million dollars? Like that sounds crazy, right? No. And I'll tell you why, because there's ROI on top of that.

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You can apply that a hundred million dollars to a certain problem space at a planetary scale and get a 10 X, a hundred X, maybe a thousand X return on that. We've actually seen that pro athletes. You see that sometimes, but they're capped.

Why? Because there's only so many people that can fit in a stadium and not everybody loves the sport of baseball or basketball. And they watch it for like pennies on the dollar on TV or whatever, but let's take technology, right? Technology, especially AI, that's a planetary scale technology. When there's 6 billion people on the internet every day, going up to 8 billion soon times just a dollar a year, that alone is $6 billion per year in revenue right there alone.

So your a hundred million dollars starts to get pretty tiny. And the global GDP is probably a hundred, 120 trillion dollars. So given you are really good at what you do and you can move the needle, even a 0.1%, I'll pay you any amount of money possible.

And you saw this recently with AI people getting paid hundreds of millions of dollars, like a professional athlete, because the scale is much larger than athletics. And the return is much larger than just a single player on a single sport because that one cornered resource, defensibility, ding, ding, ding, quiz question, it's worth billions of dollars. So when you come and you ask us a trillion dollar question, do not be surprised if our price point is a hundred million dollars, because that is the difference between winning and losing, between an outcome, between being in a competitive space or being the only game in town.

Because we got things that nobody else in the world has. And you know where that came from? It came from 30 years being on the internet in ways you can see and cannot see, in ways we've discussed and have not discussed, nor will we. And so there is massive upside.

And the real question then is one of purpose and values and alignment. The question is, who has the taste, the values, the capabilities such that we want to work with them? And that's the vibe. That's the vibe.

And that's the difference between price and value. Someone who's five bucks an hour and someone who's worth a trillion dollars, because a single idea, a single word or phrase can flip a perspective, can set a vector, can set a north star such that the whole world can align on that and competitive dynamics can be set up such that all the dominoes ripple into place over time. And it hits that exact target exactly at the moment when you want it to hit.

Difficult to do, but not impossible. So I ask you, do you have something like Picasso that's worth a hundred million dollars? How about a billion? And not in today's money and tomorrow's money, because the value of things are only going up and up and up. And it requires an incredible amount of taste, nuance, detail, strategy, experience, speed, power, relationships, yada, yada, intelligence, you name it.

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So the ball is squarely in your court. And the question is, what court are you on? What kind of ball are you holding? Is it a ball? What game are you playing? Whose game are you playing? Did you create the game? Now we're starting to talk. All right.

So if you want to make a trillion bucks, boy, do I have some ideas for you.