Value Creation Matrix

What is real transformation? In his great book ‘Zero to One,’ Peter Thiel shared some provocative views on how to build the future: be optimistic and have a definite view/plan on how to shape it. He introduced the concept of two levels of progress. One is creating a new, better service/product (from 0 to 1), the other one is rolling out an existing service/product to a new market (from 1 to N). He makes a strong argument that society and businesses should focus more on 0 to 1, to have a definite view on shaping the future.

I have found that this concept can help define what the value creation direction is of a business and what the opportunity areas are.

• Optimize – Low level of innovation, and low level of expansion
• Innovate – high level of innovation, low level of expansion
• Growth – high level of expansion to other markets, low innovation
• Transformation – high level of innovation and growth to other markets

If you look at some significant showcases of impressive transformations in the last 10 years like Disney, Microsoft or Starbucks, they always made massive steps on both axes.

In which quadrant are you heading?