I’m intrigued by the various ways people view ‘value’. There seem to be 2 camps: 1) people who view the world in terms of competition for finite resources and 2) people who see ways to create new forms of value and to grow the entire pie.
Umair Haque talks about choices companies make that push them into one of those 2 camps. He often argues that the market needs more builders than winners. He clarifies his position in his post The Economics of Evil:
“When you’re evil, your ability to co-create value implodes: because you make moves which are focused on shifting costs and extracting value, rather than creating it. …when you’re evil, the only game you want to – or can play – is domination.”
I really like the idea that the future of the media business is in the way we build value for all constituencies rather than the way we extract value from various parts of a system. It’s not about how you secure marketshare, control distribution, mitigate risk or reduce costs. It’s about how you enable the creation of value for all.
He goes on to explain how media companies often make the mistake of focusing on data ownership:
“Data isn’t the value. In fact, data’s a commodity…What is valuable are the things that create data: markets, networks, and communities.
Google isn’t revolutionizing media because it “owns the data”. Rather, it’s because Google uses markets and networks to massively amplify the flow of data relative to competitors.”
I would add that it’s not just the creation of valuable data that matters but also in the way people interface with existing data. Scott Karp’s excellent post on the guidelines for transforming media companies shares a similar view:
“The most successful media companies will be those that learn to how build networks and harness network effects. This requires a mindset that completely contradicts traditional media business practices. Remember, Google doesnâ€™t own the web. It doesnâ€™t control the web. Google harnesses the power of the web by analyzing how websites link to each other.”