WHERE CAN

IDEA COME
FROM ?
(CREATING VALUE AND
APPROPRITATE VALUE,
Trade off, Choices and
Scarcity)
 ROAD-
1. 2. 3.
MAP
4. 5. 6. 7.
8.

5 Areas for And in

idea Value Value the end Conclusio
Creating Scarcity n
generation Appropria Trade
tion Off Choices

2
 Hello!
We are Pranjali (59) and Aanchal (13)

3
 1.
What is an Idea?
a thought or suggestion as to a possible course of action.
 From You

From Others

From organization

From
Literature
From
serendipity

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6
 Value Creation
The creation of new value lies at the heart of economic development and a
population’s adaptive efficiency Value creation results from actions that
entail the novel combination and exchange of resources, by which resources
are diverted from known applications to be deployed in new contexts. To the
extent that resources are diverted away from their best known uses, novel
combinations may be allocative inefficient. Over time, however, new
combinations enable the discovery of new uses for resources, thereby
leading to an increase in what has alternatively been called adaptive
efficiency.

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Cont.
✘ Without value creation, businesses wouldn't be in business at all. Think of value creation
as the ground floor of every organization. As you create value (like the farmer turning
seeds into crops), the elevator moves up. When it reaches the top floor, there are
consumers waiting and ready to pay for the value created, which generates profits for the
business. If there's no value creation, the elevator never leaves the ground floor and the
customers look for value elsewhere.
✘ As you can see, value is created from work. Think about it this way: many suppliers
provides parts and components that go into creating the vehicle you drive. These parts
alone don't hold much value to you, do they? But, when these resources are combined
with the skill and work of employees at automobile manufacturing plants, they are
transformed into a drivable vehicle. That car or truck provides value to you, so you
purchase it. The auto manufacturer, in turn, receives the profits from you, the consumer.

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5 Steps to value
create:

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10
 Value Appropriation
Once value has been created, what rules govern the value appropriation process? In a previous section,
I identified value as being created and residing at the population level. Value is ultimately appropriated
by individuals (i.e., shareholders, employees, executives, middle-level managers, customers, other
stakeholders), but other than customers and external stakeholders, these individuals are generally
nested within firms that in turn are nested within a population. Value appropriation, then, is comprised
of two related processes: inter-organizational value appropriation (i.e., how value is distributed among
the firms within a population) and intra-organizational value appropriation (i.e., once value is
appropriated by a firm, how that value is distributed among the firm’s internal stakeholders). In this
section, I present a general theoretical framework governing both inter-organizational and intra-
organizational value appropriation. While most elements of this framework apply to both types of value
appropriation, I indicate differences between the two, most importantly the unique role of relation-
based power in intraorganizational value appropriation.

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 Trade off
A trade-off is a kind of compromise that involves giving up
something in return for getting something else
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 9 Choices an enterprenur is
making:
Whether to act ? Core Values Attract and retain the
right talent

Seek external
Where to Give up Price their product
investment

Which experts to Ideal

Success
consult Customer

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 Scarcity in
Entrepreneursh
ip
16
 Scarcity
Move, Evaluate, Repeat Pick Your Markers Be Nimble

“The biggest challenge is Evaluating your success is Identifying when the

always allocating resources impossible unless you have a company is heading down
way of measuring, and the data is
because there are never the wrong path is difficult,
useless unless it tells you what
enough,”  “You have to be willing to
you need to know. Leslie chooses
“Then you take another step, specific markers to measure recognize when something
and then you evaluate,’’  success, including company isn’t working and just pull it
growth, earnings, and the growth up and start over,”
and engagement of those who
use her site.

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 Cont.
✘ Appear Bigger ✘ Don’t Ignore You
Than You Are Leslie says scarcity is a great teacher that
Leslie says scarcity is a has forced her to be scrappy and creative.
great teacher that has “You figure out that you need less than you
forced her to be scrappy think you need.” For her, that means testing
and creative. “You figure to see if something is resonating with her
out that you need less customers, and then moving on if it is not.
than you think you
need.”

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 Conclusio
n
So, we have talked about Ideas, Value creation , value
appropriation , trade offs ,choices made by entrepreneurs and in
the end scarcity.

These were the topics which will help an entrepreneur to start an

company and do wonders with it.

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THANKS!
Any questions?

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