Create value. Capture value.

That’s all there is to it.

Alright, no stupid questions. Before we get started — what is a business?

A business is a group of people focused on creating value and capturing value.

Business is like farming. When you are ready to harvest keep back a small portion of what you’ve grown to kick start next year’s crop.

Thinking about business in this way isn’t just a good starting point. It’s a good ending point too.

It is extremely easy to get caught up in the complexities of business🕴️. Over time we have developed myriad of tools and terminology that slowly become synonymous with business. Finance, investment, engineering, HR, sales 💼. While this specialisation is undoubtedly useful, there is a risk that tools start pile up on top of each other 📚, obscuring what actually matters:

1) Create value
Focus on solving a problem.

Now, simply consider how important solving this problem is and how many people you can solve this problem for. A small problem solved for millions of people is worth a lot. So is a large problem solved for a few people.

2) Capture value
Work out how you can retain a small portion of the value you create, so you can keep on solving problems.

The vast majority of the value you create will rightly flow out into the world. But you need to capture a small portion of that value and plow it back into the field. You will use this money to either solve the same problem better, solve the same problem for more people, or start solving new problems.

I rely on this mental model of create value, capture value to frame my most important decisions. It ensures that you focus on the core of what actually matters and helps you deploy tools in a way that aids your decision making, rather than paralyses it.

So, while this blog will dive into the details, remember that any point its easy and important to zoom out to the fundamentals. Create value. Capture value.