Create more value than you capture – a session by Tim O’Reilly, Founder, CEO O’Reilly Media
Many companies start off and succeed because they are providing value to society. Microsoft and Apple, for example, connect people with easy access to desktop computers and smartphones, and made lives a whole lot easier. Like these companies, however, a trend is emerging as companies grow and succeed, the need to look after themselves seems to far outweigh the desire to keep providing value, and suddenly the only responsibility they have is “to the shareholders”.
The problem with this? Shareholders aren’t making your company money, customers are.
O’Reilly is concerned about this. “Wall Street firms, which got their start trading on behalf of clients, then began trading against them, then created vast Ponzi economies to drain the value from entire segments of the economy.”
When companies have absentee owners, no one is really responsible for their actions; they are just doing their jobs. When jobs are cut for a short term profit, the long term consequences are ignored because that will be someone else’s problem.
In times of history, people like Lincoln and Roosevelt have stood up and said “We need to change the system because we have gone off the rails.” We have gone off the rails.
“If you look at the great companies,” O’Reilly said, “they almost always have a higher sense of purpose. Investors do not create jobs, customers create jobs.”
Vested interests always have the loudest voices as they are the most established, take for example the SOPA incident. “People say we have to worry about protecting Hollywood. No we don’t. We need to find a solution that’s best for society.” Yes some people won’t pay for content, but would they ever have? Reach and awareness can generate business, and if you’re providing something of value, most people will pay for it.
O’Reilly believes that “policymakers need to focus on protecting the future from the past instead of protecting the past from the future”.
So what is the way forward?
-Create products that work for your community -Companies need to take ownership of their actions, look after employees as well as shareholders, provide value and think long term -Human creative touch is going to be more and more valuable. The success of places like Etsy and user generated videos on YouTube demonstrate this This e-mail and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed.