The framework of a legendary investor, a repeat restauranteur, and a movie producer all use.
At the 2022 Berkshire Hathaway annual meeting, Warren Buffett said he would pay twenty-five billion dollars for 1% of all the farmland in the United States – but wouldn’t pay twenty-five dollars for all the bitcoin.
At the time one bitcoin traded for $38,300.
Buffett used the: ‘not even if it was free’ framework.
Danny Meyer asks: Would I want this restaurant location if it were free? Thomas Tull’s context is movies. For him, it was: My grandmother is not going to see The Dark Knight Rises even if I gave her tickets and bought the popcorn. But, Tull questioned, movies like Batman are advertised in newspapers, read by lots of grandmothers. Another example is the Covid-19 vaccine. It doesn’t matter how well it works, how well it is marketed, or how well it is presented. Even if vaccines are easy, some people just won’t.
The structure of ‘not even if it was free’ is: People pay for perceived value.
Perceived value language can be found through JTBD. In his best interview to date, Bob Moesta demonstrates the JTBD of new windows. New windows, Moesta uncovers from homeowner Derek, come after kitchen remodels, but occur sooner if people spend more time at home.
A window’s perceived value isn’t the number of panes, types of glass, or types of gas between the glass. The perceived value in windows is when something is ‘off’.
Bob guided Derek to lay out the dominos: Covid led to work from home which led to everyone being at home which was loud and so he had to work from a distant part of the house that was only quiet when the door was shut which meant he needed a heater because the room got cold thanks to the windows.
The perceived value was making a house a home.
Window installers can use these words at the right time to raise the customer’s perceived value. If you’re a window company, Bob concluded, maybe you should follow the kitchen remodelers. That comes first. Then the window value is clear.
Buffett will probably never adjust his perceived value in Bitcoin and ditto for Danny Meyer and some locations. People do change their minds about vaccines, but only after their perceived value adjusts.