Overview
Introduction
About Value Sweep
Frequently Asked Questions

About the Book
Excerpts from the Book
Endorsements
Downloadable Spreadsheets
Recent Press
Recent Articles
Errata

The Author
About the Author
Contact the Author
Interview with the Author

Additional Resources
Real Options
Decision Analysis
Other Valuation Links
Venture Capital and Startups
Intellectual Property

Will Real Options Take Root? CFO, July 2003. Why companies have been slow to adopt the valuation technique.

Best Strategy Business Books in 2002: One of the top four is Value Sweep, Strategy+Business.

Use Martha Amram's Value Sweep: Mapping Corporate Growth Opportunities (Harvard Business School Press, 2002) to shape and select the best strategy. Value Sweep aims to provide "a practical, rigorous, and transparent valuation method for growth opportunities." Even though - possibly because - Net Present Value (NPV) analysis is widely used and computationally easy, most companies grossly misapply NPV and misestimate the relative attractiveness of alternative strategies. Amram offers sound, realistic valuation methodologies that demonstrate the need to overcome the inertia of yesterday's strategy and allow companies to assess their growth opportunities on an apples-to-apples basis. We appreciated Value Sweep for four reasons. More

Beyond the Numbers http://www.acm.org/ubiquity/ An interview with Martha Amram in Ubiquity (an ACM online publication) September, 2002.

Think Value, Not Dollars by Steven Goldman. Journal of Accountancy, August, 2002. How to value outsourcing.

The Value of Film Studios. from Chapter 10 of Value Sweep. Journal of Applied Corporate Finance. Summer, 2002.

Putting Real Options to Work to Improve Project Planning by Fabian D'Souza. HBS Working Knowledge, September, 2002. Using real options and decision analysis to optimize project schedules and milestones.

The Business Reader Review (V.5.2) August, 2002. On Value Sweep: "Properly analyzing a business investment requries a valuation tool that can measure the unique characteristics of the opportunity and evalute the resulting information in terms of current financial markets, says Silicon Valley's Amram. To achieve that goal she offers three tools for measuring value -- Discounted Cash Flow, Real Options and Decision Analysis -- and 'valuation templates' that allow the tools to be customized to the features of the specific investments."

Breakthrough Thinking on the Creation of Value. Amazon customer review (by Robert Morris, a Top 10 Reviewer) September, 2002.

This book was written for decision-makers in organizations which are in current or imminent need of: (a) benchmarking and comparing the value of their growth opportunities, (b) aligning the value of private growth opportunities with public market valuations, and (c) replacing complex calculations with simple and transparent methods. Amram re-examines and re-evaluates several of the core concepts which she and co-author Nalin Kulatilaka discussed in a previous work, Real Options: Managing Strategic Investment in an Uncertain World. However, as she explains in her Preface, she has since drawn two strong conclusions. "First, in many [but not all] applications, real options is not the right tool. I'll raise this issue through this book [Value Sweep] and show how to combine real options with other strategic perspectives. Second, decision analysis (and decision analysis coupled with real options) is quite an expansive approach; it can handle a lot of detail. Often, however, the detail overwhelms the rationale."

Here are several important questions which many organizations are now struggling to answer:

1. How can the value of growth from our new products and innovations be compared to the value of existing business?
2. Is there any rationale behind our valuations based on Internet growth expectations? Is there a way to identify and track the changing value of growth?
3. What's the value of our intellectual property? What is the value of our business models built around selling of ideas?
4. Are we prepared to tell a convincing, indeed compelling "story" about our growth opportunities that supports the value of our growth? Can we provide credible numbers with that "story"?

Amram addresses all of these and many others in 15 chapters which are organized as follows: "One Map of Value" (Chapter 1) and "The Look and Feel of Growth Opportunities" (Chapter 2), followed by three Parts and an Epilogue: Expanding the Toolkit (e.g. "Discounted Cash Flow," Chapter 3), Valuing Growth (e.g. "Growth Value Benchmarks from Venture Capital," Chapter 8), Across the Sweep of Value (e.g. "Creating the Credible Growth Engine," Chapter 13), and then her Epilogue in which she focuses on "Leading Growth" in Chapter 14 and "Marking a Spot on the Face of Value" in Chapter 15. Readers will be especially grateful for a substantial Appendix which consists of nine "Tables" for growth option lookup and estimating volatility, followed by a highly informative Glossary. I provide all this information to help the reader of this review get a more specific sense of what Amram offers in this book. Amram demonstrates exceptional writing when presenting her material.

All organizations embark on a new "journey" at the beginning of their fiscal year and must make hundreds (thousands?) of decisions with regard to the allocation of their resources. Many of those decisions have profoundly serious implications...both positive and negative. Whether or not an organization survives may perhaps depend on some of those decisions. I recommend in the strongest terms possible that Martha Amram's book be read and then re-read by every decision-maker, regardless of the size or nature of her or his organization. Obviously it cannot ensure a successful "journey" but it can certainly help to improve the odds.

Those who share my high regard for this book are urged to read Heidi Mason and Tim Rohner's The Venture Imperative.

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