value-equation

Value Equation

Command: /value-equation

From: $100M Offers by Alex Hormozi

When to use: Pricing your product, writing sales copy, diagnosing why people aren't buying, or making your offer feel more valuable without changing the product.

What it does

Applies Hormozi's Value Equation to diagnose and dramatically improve your offer's perceived value. Perception is reality — it's not about how much value you create, it's about how much the prospect perceives.

The Equation

Value = (Dream Outcome × Perceived Likelihood of Achievement)
        ÷ (Time Delay × Effort & Sacrifice)

The four drivers:

Driver	Goal	What it means
Dream Outcome	↑ Increase	The gap between where they are and where they want to be
Perceived Likelihood of Achievement	↑ Increase	How likely they believe they'll succeed with you
Time Delay	↓ Decrease	How long between purchase and getting the result
Effort & Sacrifice	↓ Decrease	How hard it is to use your product/service

The Most Underrated Insight

"The best companies in the world focus all their attention on the bottom side of the equation. Making things immediate, seamless, and effortless."

Beginners focus on bigger claims (top). Winners focus on reducing friction (bottom).

Real examples Hormozi uses:

• London underground: adding a map showing when the next train arrives increased rider satisfaction MORE than actually making trains faster (cost millions vs billions)
• Apple iPhone: made smartphones effortless vs competitors
• Amazon: one-click purchase + same-day delivery = reduced time delay and effort to zero

The infinity principle: If you can get Time Delay and Effort to approach zero, value approaches infinity. The closer you get to "buy it and immediately have the result," the more your product is worth.

Perception is Reality

"It's not about how much you increase your prospect's likelihood of success... That in itself is not valuable. Many times, they will have no idea."

You must actively communicate each value driver to the prospect. They cannot perceive what they don't know.

Prompt template

My product/service: [describe it]
My customer: [who they are]
My price: $[X]
Current biggest objection I hear: [what stops people from buying]

Apply the Value Equation:
1. State my dream outcome clearly in customer language
2. What proof/evidence increases perceived likelihood of achievement?
3. What is the current time delay to results? How could I reduce it or make it feel faster?
4. What effort does the customer currently have to put in? How could I reduce it?
5. Which of the 4 drivers is my weakest?
6. Give me 3 specific changes — ideally psychological solutions, not just logical ones
7. Rewrite my main value proposition applying these improvements

Key principle

"Anything divided by zero equals infinity. If you can make effort and time delay equal zero — you win the game." — Alex Hormozi, $100M Offers