To create value, you must first understand its nature.

If I’m a squirrel I value nuts. I value them so much that when I have too many I find places to bury them (like the flower pots on the Captain’s patio). If I’m a dog I value dog food and walks in the park and chasing squirrels. Value is how we decide what to eat and who to love and where to live and what profession to pursue; it’s a very old emotion. It’s the reason we crossed the oceans in wooden ships and built cities from stone. It’s why we have indoor plumbing and cell phone towers. Value is a fundamental force: a complex interaction between knowledge and feeling, past and future.

So what is the nature of value?

• Value is largely emotional. It arises from aesthetic appreciation and jealousy and happiness and anger — our emotions both create and shape what we value.
• Value is also cognitive. What we understand — both what we know and what we don’t know — can increase or decrease the value we associate with things.
• Value is a product of our past experiences and future expectations. It is tied to hope and regret; to pleasant memories and future fears.
• As a result of all the above, value is deeply personal. No two people share exactly the same values. Even when we largely agree, there are shades of difference based on our unique experiences and feelings.
• Value is entirely psychological. Without a mind, there can be no sense of value. Even though value may be something so fundamental that we share it with dogs and squirrels, it is not something we share with rocks or fire hydrants. Your product is never enough by itself — it does not have value unless someone knows about it.
• There’s no such thing as intrinsic value; all value is perceived. I may love the taste and smell of apples. I may appreciate their nutritional value and how easy they are to eat. I may be willing to pay upwards of $3 a pound for the very best organic varieties. But to someone that’s highly allergic to apples, they are worth nothing — they have no value.
• Value is not constant. It can be created in an instant and evaporate just as quickly. I purchase a large bag of high-quality apples. That evening I turn on the news and hear that people have been getting seriously ill from a new pesticide that was sprayed on the apples I just bought. Earlier in the day I valued them at $3 per pound, now they are worthless.
• A baker buys apples to make pies. A mom buys apples to give her kids healthy snacks. A stable owner buys apples to treat her horses. People who value the same things do so for different reasons.