“Form of Value #10: Option”

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What is an “Option”? (Form of Value #10 of 12)

“You pays your money and you makes your choice.” — Punch, nineteenth-century British comic magazine, 1846

Key Points:

• An option means taking a predefined action for a fixed period of time in exchange for a fee. Movie tickets are options!
• To provide value with this form of value you must:
  
  
  
  • Identify an action people might want to take in the future.
  • Offer potential buyers the right to take that action before a specific deadline.
  • Convince buyers that the action is worth the price.
  • Enforce the specified deadline on taking action.
• Options allow the purchaser the ability to take an action without requiring them to do so.
• Options help keeping specific courses of action open for a period of time before another transaction takes place.

Questions for Consideration:

• Does delivering value via offering options make sense for your business idea?
• If so, what do you need to plan for to make it successful?

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