Business modelsVenture Capital

‘Good wins out over evil’ – a cheery thought for the weekend

By November 9, 2007 12 Comments

One of the reasons I like being a VC is that I think the work we do makes a difference to the world in a positive sense – or at least it does when the work is done well.  There are at least two levels to this – as an industry we are a catalyst for innovation, and as individuals we help build companies (which can be a profoundly enriching experience for all involved).

So you can imagine the philanthropic side of me was happy to read Umair saying that in the new corporate world good wins out over evil:

What makes revolutionaries – well, revolutionary – is the desire to change the world. For the better.

Almost all of today’s new market leaders, interestingly, share this trait: it is a deep genetic difference that underpins advantage.

Why is it that people who want to change the world for the better are suddenly winning out in business, when historically that hasn’t always been the case?

Today’s real radical innovators know that games of coercion and domination really don’t work very well in the edgeconomy – because you can’t coerce all of the people all of the time.

To explain:

Pre the internet consumers didn’t have access to good information and production technology made it difficult for companies to innovate quickly.  So the value maximising strategy was to control and manipulate the media to sell as much of your existing product as possible.

These days the game has changed in two ways which demand a relationship of trust between company and customer.  Firstly the internet makes it impossible for anybody to control the message any more, and secondly smart companies are now co-opting consumers into their product design processes.

Hence good wins out over evil.  Consumers will engage with radical innovators who are changing the world and help them to achieve their goals.  They will run from companies who are perceived to be manipulating or exploiting them.

The current hooplah about Facebook’s ad platform is an example of this playing out in practice.  People are worried that Facebook will shift from its current position of trust and exploit the personal information in their profiles to drive excess profits.  This shift from good to evil might kill the company, is the implication of a lot of what is being written – and I agree it might.  This is very clear in Umair’s post.