Successful entrepreneurs understand a critical thing: There’s no such thing as money.
It seems to go against the grain, doesn’t it? After all, you probably have bills in your wallet. There may be pennies riding around on the floorboards of your car. You use credit cards and debit cards and checks to buy anything you need. “This guy must have lost his mind!” you say. “How can he assert ‘There’s no such thing as money?’ ”
The existence of many types of money — the credit cards and coins and dollar bills — proves the point. All of these things work as money because, collectively, we say they do.
To make a purchase using a small piece of plastic embellished with embossed numbers and a magnetic strip, you present it to a cashier or swipe it through a reader then put it back in your wallet. If you make a purchase using cotton paper printed with complex designs or small round metal relief sculptures, you give these things away and never see them again. These processes are fundamentally different, yet both can be used to make a trade.
Why? What makes it possible to use this wide variety of objects and procedures? This entire system works because all of us agree that plastic cards, paper and metal can be used as stand-ins for something else, like the “X” in an algebraic equation. Dollar bills and credit cards are nothing more than placeholders — representations of value — that accurately describe the way we feel about the products and services we purchase. Money does not exist, but value is very real.
Entrepreneurs Don’t “Make” Money; They Create Value
The abstract thought manifested in a credit card is a remarkable leap forward in human evolution. Billions of people are engaged in a collective agreement that states “the coins, paper currency and credit cards that we carry around with us represent real value and can be exchanged for everything that is grown, manufactured or collected from the Earth.” It’s taken thousands of years for us to develop this all-pervasive agreement. Every aspect of modern life, from cell phones to delivery pizza, hinges on its existence; modern society would not be possible without this planet-wide contract.
This agreement was created by blank page entrepreneurs. When people began to trade with one another, the need for a standard currency was born. And now, many thousands of years later, entrepreneurs still ask customers to trade one thing of value — money — for another. But a trade cannot happen until an entrepreneur convinces a customer of the value of his offering. To become a successful entrepreneur you must understand the nature of value and how to create value in the minds of customers. Until you do, you won’t earn any money.
This is a critical distinction that blank page entrepreneurs must understand. An entrepreneur doesn’t “make money.” An entrepreneur creates value that is exchanged for money. Once you understand the difference, it can radically change the way you perceive your role. And perception is, of course, the foundation of all we plan and all we execute.