Compared to What?

Start with a comparison instead of a definition.

A campus dining hall is not a better product than a grocery store. The food is already made, it is already there, and your friends are there. The grocery store gives you choice and quality, but you have to do the work - go, decide, carry it home, cook it. Which one is worth more depends entirely on who you are and what your afternoon looks like. A student between classes and a family cooking for the week are not choosing between a good option and a bad one. They are solving different problems.

That is what value creation means. Value is not a property of a product. It is what happens when a specific person, in a specific situation, gets a problem solved better than the next best thing they could have done instead. Change the person or change the situation, and the same product is worth something different.

Two things follow, and they are the reason this is worth more than a definition.

First, you are competing with more than your rivals. The hardest competitor most businesses face is the status quo - a person continuing to do exactly what they already do. To switch, someone has to notice they have a problem, consider your offering, weigh what else they could do instead, accept the risk that it does not work, learn to use it, and then check whether it was worth the trouble. All of that sits on top of everything already in their day. Which is why marginal improvement usually loses. You have to be overwhelmingly better than the alternative, not slightly better.

Second, profit is a symptom rather than a goal. If a business is profitable, that is evidence it is probably creating value for someone and keeping a piece of it. Evidence, not proof, and it decays. A price increase your customers cannot avoid today teaches them to start looking for alternatives tomorrow. Everyone in the chain has to be winning something, and any link where a person could do better elsewhere eventually breaks.

So the question to carry into the four stories below is short: who is better off, and compared to what would they otherwise have done?

In class this week

BUSI 103 takes up value creation on Tuesday. The case we open with is one my students can walk outside and look at, which is a liberal arts college deciding to build a business program where none existed.

The recipe is not the hard part. You can watch how other schools do it, and there is a lot of commonality - resources, faculty, courses. Demand is not the hard part either, since business is one of the most sought-after majors in the world. What binds is less obvious. Large universities aggregate business faculty into MBA programs, and a great deal of undergraduate business education runs off the excess capacity of those very large programs. A liberal arts college has no such capacity lying around. It has to build while competing against schools that spread the same faculty over a much bigger base.

So the question is not whether we can copy the recipe. It is what we can offer that a better-resourced school structurally cannot. Hold that one until the fourth story.

The stories

1. The “Country Hicks” Who Refused $26 Million from an AI Data Center The Wall Street Journal, August 17, 2026

A Kentucky mother and daughter were offered $26.48 million for farmland their family has worked since 1848 - 463 acres at $48,000 apiece and 71 more at $60,000, roughly ten times what the open market would pay. When they learned the buyer wanted the ground for a 2.2-gigawatt data center, they had the agreements revoked and said no. Maysville, population 8,700, where one in four residents lives below the poverty line and median household income is about $39,000, has been arguing about it ever since.

Nothing about the land changed between the two valuations. What changed is who was looking and what they were trying to do. Watch how the same 534 acres are worth wildly different amounts to different people in the same small town - the owner of the bar directly across the street from the proposed site says she would take the money and “live instead of struggle.” Then watch what actually binds for the buyer. The company has the opportunity, the capital, the know-how and the technology to build a data center. What it cannot manufacture is this specific piece of ground and the willingness of the woman who owns it. Every party in a chain has to be winning something, or the link comes apart. Here one of them is not.

Read it

2. FTC Warns Retailers on Using Private Consumer Data to Raise Prices The Wall Street Journal, August 20, 2026

The Federal Trade Commission told companies they must clearly disclose when they use detailed personal data - browsing history, location, device type, even how long your cursor hovers over a product - to personalize a price. The agency says it cannot ban the practice but will enforce the disclosure standard. Instacart was found to have let retailers vary prices for individuals across four cities who added identical items to their carts at the same moment. It scrapped the tests after customers objected.

Wanting something and paying for it are two different things, and the gap between them is where a business either survives or does not. This is that gap turned into an operating system, and it is worth sitting with how uncomfortable that is. Firms have always charged different groups different prices based on what those groups will bear, and student and senior discounts are the friendly version of the same move. The new capability is doing it one person at a time. Notice also that three authorities have landed in three different places - New York now requires disclosure, Maryland banned individual-level food pricing algorithms, and the FTC picked a third position. Every economy runs on rules. Those rules are a design choice, and this is one being designed in public.

Read it

3. Look for New Ways to Create Value When Deploying Gen AI Harvard Business Review, February 27, 2026. Adam Job, Sangeet Paul Choudary, Ulrich Pidun, Jeffrey Sprong

The authors examined 800 public companies and found no link between how automatable a sector is and whether its firms became more profitable. Their reading is that using AI to do the existing work faster has become table stakes rather than an advantage, because every competitor can buy the same speedup. Their analogy is portrait painters facing photography. You could not survive that by painting portraits more efficiently, because the new technology cut what customers were willing to pay for the old thing.

Read this one against the idea that profit is a symptom. A cost saving any competitor can copy shows up in the income statement for a while and then gets competed away to customers, which is exactly what should happen when an improvement is not attached to anything a rival cannot also do. The uncomfortable question underneath it: what would a company have to change about the problem it solves, rather than the speed at which it works, for the gain to stay with the company?

Oberlin students, see the access note below. Everyone else, the argument is summarized closely enough above that the paywall is not costing you the point.

4. Relationship-First Digital Transformation: How Small Financial Institutions Can Compete in an Open-Banking World California Management Review, February 26, 2026. Murat Kristal, Andreas Strebinger, Johnny Rungtusanatham, Ting Cao

Studying Canadian banks and credit unions over several years, the authors argue that small and mid-sized institutions should “invest to stay close” rather than “invest to scale.” When open banking commoditizes the products themselves, trust and relational continuity become the durable asset. They are unusually specific about what that choice costs: giving up speed, giving up broad technological experimentation, accepting vendor constraints, and deploying technology only where it demonstrably strengthens a customer relationship.

This is the business-program problem from the top of this post, wearing a different suit. An institution that cannot outspend a larger one has to find something the larger one structurally cannot copy, and the article is honest that this means saying no to things. That is what a tradeoff actually is, as opposed to a plan where everything gets better at once. I am not fully convinced - I am not sure trust is as hard to replicate as they claim, and I would like to hear the case against.

Oberlin students, see the access note below.

One question to carry

Pick any single story above and answer two things about it. Who is better off, and compared to what would they otherwise have done? If you can answer those cleanly, you have most of what matters here.

For my Oberlin students

Two of these four sit behind subscriptions the college already pays for, so there is no reason to pay twice. Activate your access once and the links above just open.

• New York Times: register at nytimes.com/grouppass. You have to be on campus the first time, and it renews yearly.
• Wall Street Journal: register at wsj.com/oberlin. Works off campus and covers the last four years.
• Harvard Business Review: open it through EBSCO Business Source Complete and search the title - HBR in Business Source Complete.
• California Management Review: same database, search the title and authors.

If anything here hits a paywall anyway, email me and I will get you a copy.