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Good Processes Create Value

by Michael Webb | Comments (0)
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In preparation for the launch of the book August 2, I'll be on a short vacation with the family next week. I won't be posting anything until Aug 31, so I'll leave you with a couple of observations:

It seems a little bizarre, yet aside from being a curiosity this story vividly illustrates the possibilities of sales and marketing. Kyle MacDonald found people who wanted something he had, and successively traded to improve his position (and theirs). First he traded the paper clip for a pen shaped like a fish. Then he traded the pen for an antique door knob. Soon he was up to a used Coleman stove, and then a skidoo. Helped by the immense exposure made possible by the Internet (and eBay, apparently), his project caught media attention, and soon he found a city (Kipling, in Saskatchewan, Canada) that was interested in helping him achieve his goal by trading one of their houses to him.

Value was created out of thin air. Nobody lost, everybody gained! The thing is, even if it hadn't attracted much media attention, it is clear from Kyle's path that he would have succeeded anyway, eventually.

This demonstrates a scrappy kind of creativity, yet it also demonstrates the power of understanding what other people value.

Jim Barksdale, one of the executives behind the early success of Netscape, was quoted once in Fortune magazine saying something to the effect of:

"One challenge of entrepreneurship is that most people don't have much insight into what other people will really buy." (I don't have the original here, so I'm paraphrasing from memory - please correct me if you have the exact quote). 

Boy is that ever true. Kyle's new house quite an achievement. And it affirms the work of sellers and marketers everywhere, who have to learn what other people want and find ways of giving it to them. 

So they can create value out of thin air!

Michael Webb
July 21, 2006

 

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