People think that what a business does is make money. But money is just the intermediate stage — just a shorthand — for whatever people want. What most businesses really do is make wealth. They do something people want.4

Every business is created by people and survives by benefiting other people. To understand how businesses work, you need a firm understanding of how people make decisions, act on those decisions, and communicate with others.

Roughly defined, a business is a repeatable process that: 1. Creates and delivers something of value … 2. That other people want or need … 3. At a price they’re willing to pay … 4. In a way that satisfies the customer’s needs and expectations … 5. So that the business brings in enough Profit to make it worthwhile for the owners to continue operation.

At the core, every business is a collection of processes that can be repeated to produce a particular result. By understanding how complex systems work, it’s possible to find ways to improve existing systems, whether you’re dealing with a marketing campaign or an automotive assembly line.

Roughly defined, a business is a repeatable process that: 1. Creates and delivers something of value . . . 2. That other people want or need . . . 3. At a price they’re willing to pay . . . 4. In a way that satisfies the customer’s needs and expectations . . . 5. So that the business brings in enough profit to make it worthwhile for the owners to continue operation. It doesn’t matter if you’re running a solo venture or a billion-dollar brand. Take any one of these five factors away, and you don’t have a business — you have something else. A venture that doesn’t create value for others is a hobby.

The best businesses in the world are the ones that create the most value for other people. Some businesses thrive by providing a little value to many, and others focus on providing a lot of value to only a few people. Regardless, the more real value you create for other people, the better your business will be and the more prosperous you’ll become.

Business is a human enterprise, driven and determined by people.

I’ve said countless times that many of the world’s problems are going to be solved by entrepreneurs. The simple reason is that entrepreneurs are problem solvers.

The purpose of business is to create and keep a customer.

Every successful business (1) creates or provides something of value that (2) other people want or need (3) at a price they’re willing to pay, in a way that (4) satisfies the purchaser’s needs and expectations, and (5) provides the business sufficient revenue to make it worthwhile for the owners to continue operation.

Business is just a never-ending cycle of starting and trying new things, asking whether people will pay for those things, and then trying it again based on what you’ve learned. If you’re afraid to start or ask, you can’t experiment. And if you can’t experiment, you can’t do business.

The business of business is people, not products or services. Take care of the people, and the people will take care of you.

Thousands of years ago, it was only kings, pharaohs, and emperors who had the ability to solve large-scale problems. Hundreds of years ago, this power expanded to the industrialists who built our transportation systems and financial institutions. But today, the ability to solve such problems has been thoroughly democratized. Right now, and for the first time ever, a passionate and committed individual has access to the technology, minds, and capital required to take on any challenge. Even better, that individual has good reason to take on such challenges. As we will soon see, the world’s biggest problems are now the world’s biggest business opportunities. This means, for exponential entrepreneurs, finding a significant challenge is a meaningful road to wealth. Ultimately, as I teach at Singularity University (much more on this later), the best way to become a billionaire is to solve a billion-person problem.

Businesses are great structures for managing big projects. It’s like trying to develop the ability to walk without developing a skeleton. Once in a blue moon, you get an octopus, but for the most part, you get skeletons. Skeletons are good shit.