Chris Dixon, co-founder of Hunch, and investor in several tech companies, neatly summarizes what business is all about.
Tim O’Reilly poses a question every entrepreneur and investor should consider: are you creating more value for others than you capture for yourself? Google makes billions of dollars in annual profits, but generates many times that in productivity gains for other people. Having a positive social contribution isn’t limited to non-profit organizations – non-profits just happen to have a zero in the “value capture” column of the ledger. Wall Street stands at the other extreme: boatloads of value capture and very little value creation.
I think of people who aim to create more value than they capture as “builders” and people who don’t as “extractors.” Most entrepreneurs are natural-born builders.
According to this Ad Age piece, Erin Mulligan Nelson, VP-chief marketing officer at Dell, is on board with purpose-driven business, as well. This is what she believes:
A brand has to have a reason for being. It should make a difference in the world in some way. Moreover, a brand has to have an organization that powers it — an organization that is passionate and committed to bringing that brand to life in all facets of the company. The power of a brand starts from the people who create the experience every day. And the purpose the brand represents needs to come through at every possible touch point.
Why purpose? Consider the old story about the janitor at NASA. When asked what he was responsible for doing, he didn’t say, “I clean this building every day.” He said, “I am enabling a man to be sent to the moon.”
It seems to me lack of purpose haunts the ad business. Oh, I know there is a method to the madness. It breaks down along two lines. One is all about how much money can be “extracted” from our clients. The other is all about whether or not the client will allow us to exercise our creative muscles and feed our over-sized egos. The problem is there’s very little value being created for others in this system.
Our work ought to make people feel something, and it ought to educate. When it does help the audience in some way and grows the client’s business, it’s a big win–much bigger I will argue than a win at Cannes or One Show. Industry awards might make us feel good about ourselves, but they’re all about us, and that’s not what it’s all about.
