The Value of a Good Story

Can a good story make something more valuable?  Consider diamonds.

Man-made, "synthetic" diamond are produced in a lab by either high pressure and heat or a chemical process.  It takes about a week or two.

Real diamonds are produced about 100 miles below the Earth's surface over a couple billion years.

The truth is, "synthetic" diamonds aren't actually synthetic.  They are in fact real diamonds.  But they have a terrible story and sell for about 30% less than a real diamond and few people buy them.  No future bride wants to show her friends an engagement ring that was grown in a lab by a man in a white coat.  Its not romantic and not exciting.

How much would you pay for this old guitar?

At first you might think it's just a beat up piece of wood and electronics that you wouldn't waste $50 on at the local pawn shop.  But it's more than just a beat up piece of wood.  It's the guitar that Eric Clapton played from 1970 to 1985 and was on the cover of his albums "Slowhand" and "Just One Night".  He named it Blackie.

Now how much would you pay for it?  In 2004, Guitar Center purchased Blackie at auction for $959,540, making it the world's most valuable guitar at that time.

The story is important.  Like the diamonds or Blackie, people are not paying for what the item is.  They are paying for the story behind it.  With out the story, a diamond is just a piece of carbon and a guitar is just a piece of wood.