Create More Value Than You Capture at #SXSW2012

Monday, March 12, 2012 at South by Southwest Interactive Conference, Austin, TX
by Tim O’Reilly (Founder, CEO – O’Reilly Media) and moderated by  #sxsw #values

What companies have done is stopped taking care of our clients and customers and thinking of themselves first, even when it goes against the good of their customers and clients.

It is important to understand that monetization comes later, but the really good things come from people having fun or providing a good

I wouldn’t say I’m a first rate capitalist. I have more than one billionaire come up to me and say, “It all started with one of your books!” And all I got out of it was $35. – Tim O’Reilly

One of the things that is not good about the current state of entrepreneurship is building something to sell it to move on to the next bigger thing. At O’Reilly, they never took a dime of venture capital. They found customers that felt that they provided value. We need to get back to (and there is currently a resurgence of) companies that are creating things to provide value.

We don’t have enough people who are trying to make a difference.

There is too high of a proportion of people chasing the money. Most of the good companies have some form of higher purpose (big, hairy audacious goals).

The clothesline paradox

Open source and generosity shrink the measurable economy, but they actually grow the economy in other ways.

Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy

Investors don’t create jobs. Customers create jobs.

We have to put labor back into the economy and it may be a completely new model, but we need to get going. One of the signs is the use of computing to add value to what used to be low skilled jobs, like the Apple store. Retail sales jobs are disappearing, but Apple has figured out that you can create a better customer experience by enabling salespeople with technology. Walgreens is trying to do the same thing for prescriptions. Healthcare is another example, where they’re trying to create a new method for tracking an overall healthcare plan and giving health providers credit for the people they take care of that remain healthy.

Etsy – someone takes a commodity product (like a lamp) and adds value (by customizing it in a new way). We’re starting to see the shape of some interesting new economic transitions. Even when something doesn’t appear to be monetizable, it eventually becomes monetized. The point is to add value or make something valuable. Kickstarter & Airbnb are other good new models where the power goes back to the consumer.

Policymakers need to focus on protecting the future from the past, instead of protecting the past from the future.

What is your advice for a young innovator/entrepreneur?

1. Work on stuff that matters. Work on stuff that you will look back on and be proud of. What would you do that you would die for? …because what you’re doing now is what you would die for.
2. Find people that are just as passionate about what you do as you are.