A new theory of value
Everyone wants to know, quicker. Or as The Preacher said, "knowledge shall increase."
After 11 months of silence, Money Myths Africa is back! In the past few months, I’ve had the unique opportunity to listen, talk to, and worry about digitizing x. And next year, it will be my focal point. But before this, I have some news I’d love to share before we all tune out of 2022.
Photo: DALL-E
I am fascinated by the concept of value. What is it? How do people find it, create it, transfer it and destroy it? It is a broad theme. But I am curious about value in a narrower sense. What is value in the information age?
The kicker, however, is that every age is an information age. Every epoch is marked by human progress in some area. Progress generated by new knowledge. That striking two stones produced fire and burnt animal flesh and heated plants tasted better and caused fewer stomach upsets. That fire could make better sharp objects from red, yellow, gray, or purple rocks (iron ore). And that if you arranged metals in a certain way, you could create machines that made work easier.
Information or knowledge is inextricably linked with value, or worth. And to a large extent, value is not subjective, the price of value is what is.
Why is this important?
In the digital ecosystem and human markets in general, the price of value (more commonly called valuation) is how we try to discover what something is worth to the buying and selling parties. But in pricing value, we rely on information and disclosures from both parties. It is at this point that another type of value comes into play to help with decision-making. Consciously or not, we have all weighted decisions on available information.
It is exactly why our brains and nerves exist. I’ll call this, information value.
Information value represents the most important value of today. Previously, the exclusive preserve of the elite, the wealthy, and the connected, more information than ever before is now openly available. It is why virtual and corporate wars are fought over the control of social media platforms. It is why politicians (whose stock in trade is information) prefer subservient media. And it is why semi-conductor chip technology is a front (and a potential reward) for the new Cold War. Because at the core of information value is speed. And in the digitally-mediated dynamism of today, everyone wants access to the latest, faster.
Information value—and the appendages and connections to value in the broader sense—is an understated component of building businesses digitally. Even for the more boring business forms.
Every week of the first three months of 2023, in ten essays, or less and a couple of virtual coffee room sessions, I invite you to explore this new world with me. For investors, I expect this thinking experiment to open new ways of approaching pricing for private and public companies. For entrepreneurs, we will co-discover mental models for finding the information gaps that can unlock business growth.
Who’s ready to learn?