Bootstrapper.com - Confessions of Serial Entrepreneurs

So today I’d like to talk about how to value stuff. A lot of times, people tend to look just at functional value of something you are doing. Ie: you contributed $10 in value and you should get $10 back for it. However, when approaching a new situation, you have to look at the opportunity cost of all the players involved. What does it cost the person in terms of lost opportunity and time to be involved. A lot of times peoples don’t value their partners opportunity cost and that causes issues because $1 of someone’s time may cost them $3. So be conscious of this when setting up new partnerships. If your partner thinks he is giving up too much opportunity cost / isn’t being valued, he very well may either start working less or walk away.