Option

In The Personal MBA an option means taking a predefined action for a fixed period of time in exchange for a fee. It is one of the Twelve standard Forms of Value (Form of Value #10 of 12). Options are valuable because they allow the purchasers with the ability to take a specific action without requiring them to take that specific action. Options are often used to keep courses of action open for a certain period of tiume. Options are often an overlooked form of value - flexibility is one of the Three Universal Currencies. Find a way to give people more flexibility and you may discover a viable business model.

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?

Source: http://book.personalmba.com/option/