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2 / 2 · Apply to a scenario

First Principles · 02

Stress-test a real scenario

Real-world friction warps the engine. Pick a case, read the story, move the numbers, then decide what you would verify before building.

Choose a scenario

Approval Burden

A tool automates expense reports so employees save real time entering them. But it also adds a new step: every expense now needs a manager’s approval before it’s processed, which didn’t exist before. Employees gain time; managers lose time approving things they never used to approve. If you only count the employee side, you’d call this $100 of value. Once you subtract the new approval hassle, the real value to the whole company might be much smaller.

Value for the customer$100 claimed for the customer
Value you may capture$20 paid to you
Cost to serve−$8
Contribution (price − cost)$12
The pitch says $100 of value for the customer. Your first job is to verify that number — for the customer, not your margin — before you debate price.

Work this case

Your starting question as a seller: how much value are you actually creating for the customer? The deck says $100 — stress-test that before anything else.

1 · What value are you creating for your customer?

If you think you are creating $100 of value but the customer only gets $35 — or loses $20 — you cannot sell credibly. Start here, before price or margin.

You believe you are creating $100 of value for the customer. That is the number in the pitch — but it only counts employee time saved, not manager time lost.

Switch to what the customer actually gets — the number you must believe before you can sell.

2 · Make your call

What would you investigate first?
Work on your idea Learn from an example