“You’ll realize my worth only after I’m gone” is the battle cry of overbearing Asian mothers everywhere. If you can’t relate, you need to diversify your social circle :)
Now, what do overbearing Asian mothers and the writer David Perell have in common? They both concur on the Counterfactual Theory of Value.
Let me explain. A couple of weeks ago, we spoke about the Locksmith Paradox, people’s perception of value, and why a woman regretted asking Picasso for a favor. Perell proposes an alternative framework to assess and measure value.
The Counterfactual Theory of Value suggests that the value of something should be measured by the negative impact of its absence. For example, baseball managers use the Counterfactual Theory of Value all the time, using a statistic called “Wins Above Replacement.” It predicts how many more wins a player gives their team, compared to whoever would replace them.
In our current economic scenario, it’s a good time to reassess your initiatives and double down on only those that have a scalable impact and drive sustainable growth. According to the 2022 OpenView SaaS Benchmark report, companies with 25+ months cash runway are cutting back as much as ones with just 6 months. Across segments and businesses, there’s an urgent need to become leaner and focus on operational excellence.
So as you sit down to reevaluate your projects, the onus will be on you to decide which one gets put on the back burner for now - the new GTM play, your quirky ad campaign, or your research passion project? When it does, it might help to ask - “What’s the counterfactual?”
What we’re reading
After years of valuing growth over profitability, how are SaaS founders reconciling to the changing macro conditions? With key takeaways on SaaS businesses across growth stages, the 2022 OpenView SaaS Benchmarks report is worth a deep dive.
After reading the OpenView Benchmarks report and realizing that PLG leaders are growing 50% year-over-year, far faster than traditional SaaS companies (21%), are you itching to stretch your PLG muscles?
Here’s our go-to PLG guy Kyle Poyar’s guide on reverse trials - yes, it’s as interesting as it sounds!
And here’s why you should rethink your user journey with PLG: Follow your users to understand how to excel at Go-to-Market