The Presidents’ Forum of The Presidents’ Forum of Orange CountyOrange County

Keith HalfordKeith Halford

March 11March 11thth, 2008, 2008

Value CreationValue Creation

• The Keys are:The Keys are:– Identifying Value Opportunities Identifying Value Opportunities – Managing the processManaging the process

• Three Real World examples in Three Real World examples in the the – MediaMedia– Services Services – Technology SectorsTechnology Sectors

The Value of MediaThe Value of Media

• QVC #1 TodayQVC #1 Today Has shipped 1 Billion PackagesHas shipped 1 Billion Packages

• But QVC was the 34But QVC was the 34th th Entrant! Entrant!

• A Little BackgroundA Little Background

Value (QVC’s middle name)Value (QVC’s middle name)

•QVC’s needs were similar to QVC’s needs were similar to those of most businessesthose of most businesses– New customer acquisition New customer acquisition – Customer retention Customer retention – Build barriers to entryBuild barriers to entry– Ability to manage changeAbility to manage change

But the real Innovation was…But the real Innovation was…

The Value Proposition was The Value Proposition was distributiondistribution

• Cable partnersCable partners

• Equity for distributionEquity for distribution

• Concurrent IPOConcurrent IPO

• Funding and Barriers to Entry Funding and Barriers to Entry createdcreated

The Value in ServiceThe Value in Service

•From Chapter 11From Chapter 11

to Real Valueto Real Value

Confused Value PropositionConfused Value Proposition

•Associations & MLS Service Associations & MLS Service

inactivityinactivity– Large Companies Large Companies – Innovative RealtorsInnovative Realtors– Same contentSame content– Few Barriers to entry Few Barriers to entry

•FSBO Sites seeking disruptive FSBO Sites seeking disruptive advantageadvantage

Little Consumer Value!Little Consumer Value!

•The Old Model didn’t workThe Old Model didn’t work– Home sellers were asked to payHome sellers were asked to pay– Alternative to Real Estate Alternative to Real Estate

CommissionsCommissions– Went BankruptWent Bankrupt– The Innovation was …The Innovation was …

..if you can’t sell it…..if you can’t sell it…

Create new value Create new value relationshipsrelationships

•Give it away!Give it away!– Same site construct but Lead Same site construct but Lead

generation was the new value generation was the new value propositionproposition•Free listings = maximum Free listings = maximum

adoptionadoption

•UpsellsUpsells

•Mortgages & Title companiesMortgages & Title companies

•Insurance and so on and so onInsurance and so on and so on

Values in Changing MarketsValues in Changing Markets

Restoring diminished valueRestoring diminished value

• The Ingredients:The Ingredients:– Old cell phonesOld cell phones– SMS & GPSSMS & GPS– Smart web workSmart web work– Razor and blade revenue Razor and blade revenue

modelmodel– Service orientationService orientation

There’s value in qualityThere’s value in quality

There’s value in There’s value in convenienceconvenience

Value in LeadershipValue in Leadership

• The Process of Innovation +The Process of Innovation +

• The Management of Change =The Management of Change =

• The creation of ValueThe creation of Value

Thank You!Thank You!