Let’s say you are starting a startup and today you are standing in front of a venture capitalist.
With impatience in his voice, the VC says,
“Tell me again exactly what your enterprise is for. How are you going to create value?”
This is what we do to dreamers.
Because the answer to this question almost always comes to you in a mad conceptual scramble for the simplest, most obvious, most literal statement of what your enterprise is “for.”
You stand, you deliver:
“Our product will help people solve problem x for consumer y cheaper than competitor z.”
But not so fast. Because now you are wedded to it. Every time someone asks, you are obliged to repeat your simplest, least interesting statement of what your company is for.
It’s the opposite of poetry. Every time you repeat your “value proposition” it gets more obvious, practical, functional, literal, uninteresting and unbeautiful. Your dream is withering.
In the summer of 2015, Hal Varian, Google’s chief economist, insisted, against all measures and most opinion, that U.S. productivity was actually up.
The trouble, he suggested, is that we can’t see these gains because we are using old measures. When the GDP measure was developed in the 1930s, Hal observed, it focused on things like steel and grain. The improvements that come from Silicon Valley are harder to see.
Radical Hal. No, call him Heretical Hal. This was the beginning of the end of capitalism as a blunt object, as a search for mere utility. This was an opportunity to free ourselves from those people who see the world as a solutions to problems, and the more pragmatic and practical the better.
But we can’t complete this heresy until we begin to make certain value visible. We need to show how our enterprise will create value of a social, cultural, human kind. We will have to show that Uber is not merely cheaper than a taxi cab, but a richer, more human way to discover a city. (I set aside the labor issues for another time.) We will have to show the Airbnb is not merely a cheaper hotel room, but that it is a richer, more human way to discover a city. As it stands, and as far as capitalism (and Uber and Airbnb themselves) are concerned, this remains “dark value.”
Sometimes dark value is revealed, but typically this revelation comes late in the process. Ideas happen, capital is made added, enterprise springs into the world, innovations are rolled out. And then someone says, “Er, what about marketing?” Planners, strategists, creatives, designers, ethnographers are summoned to contemplate this poor, beaten creature.
With any luck the post mortem goes pre mortem. The innovation springs to life, it’s coat glossy with new meaning. But often even this creative genius can’t do anything for the “innovation.” It is beyond all hope. It is designed to solve a problem that no one cares about because it adds virtually nothing to the world. “Whiter whites” are a death mask.
But sometimes these creatives discover, invent, conceptualize dark value. And the consumer will say, “Oh, that’s what it is. You kept telling me what it’s for. No, that I like. I can live that.”
By this time of course it’s all up stream. The creatives are working with something that’s mostly formed and they are working with people who really in their heart of hearts think “all the creativity stuff is really just icing for the cake. It’s the sizzle that sells the steak. It’s the stuff you have to say to persuade the consumer to buy a product that frankly should have sold itself on the strength of it’s functionality. I mean, really, what is the matter with these people.”
What if we started looking for and working with dark value from the very beginning?
And if this sounds like a good idea, please consider buying my new book Dark Value here. It’s a bargain at $2.99.
Thanks to Leora Kornfeld for engaging me this morning with a useful email. And thanks to many people on many media who have offered encouragement for the Dark Value project.
The image is from this website.
Intriguing post, Grant. I have two questions:
1) Are you going to release the book in any non-Kindle formats?
2) You write: “…we can’t complete this heresy until we begin to make certain value visible. We need to show how our enterprise will create value of a social, cultural, human kind. We will have to show that Uber is not merely cheaper than a taxi cab, but a richer, more human way to discover a city. (I set aside the labor issues for another time.) We will have to show the Airbnb is not merely a cheaper hotel room, but that it is a richer, more human way to discover a city. As it stands, and as far as capitalism (and Uber and Airbnb themselves) are concerned, this remains “dark value.””
I like where this idea is going, and agree that not all value can be measured with the traditional tools. But if we think about making “social, cultural, human” value visible, can we really separate the negative impacts from the positive ones? What should be taken into account in the measurement and evaluation of “dark value” outcomes? Should companies even care?
For example, Uber riders and Airbnb guests may benefit from seeing cities in a new way, and some people have alternate means to make money off their personal property (another benefit). What about the impacts on others within the system, going beyond just the free market and capitalism and access to resources/power, to the social, the cultural, the human.
For example, you have taxi cab drivers and companies and hotels on the one hand that have to play by long-established rules and regulations, while the “innovators” take advantage with their newfound social, political and economic capital. Another example: Airbnb impacting the housing markets of certain cities as more places are provided for visitors than those who live there (whose options are limited). Or, Uber discriminating against the disabled, threatening journalists, and shafting its drivers?
Does any negative dark value get subtracted from the total put forth by a new idea/product/service? Does the social, cultural, human value put forth become more important than that of those who are losing out, if it’s an “improvement” in the short- or long-term? Is there a gross “dark value” and a net “dark value”? Can/should it be quantified?
It seems to me these are two companies that are both solving problems and creating new ones, creating “social, cultural, human” value while also taking it away.
Just some food for thought I’d love to get your take on (and perhaps you address this in your book).
IMO, I think dark value can be incorporated into the pitch. I work with entrepreneurs and have helped craft a number of pitches over the years. I find that including the dark value in the pitch is more a function of the founder’s mindset and how important it is to him/her.
Sadly, the world changed and a lot of founders became more focused on ego trips (raising funds/valuation/lavish life styles/etc.) than on either sustainable growth or dark value. However, the pendulum is swinging back and I believe pitch focus will swing with it.