Value creation - Has the digital economy created the wrong narrative?

[caption id=“attachment_87862” align=“alignleft” width=“380”] Radhakrishnan is head of digital - South Asia at Maxus (courtesy: @unnyque)[/caption]

By Unny Radhakrishnan

I am not an entrepreneur who has built a company, so that straightaway disqualifies me in attempting to write a piece like this. But then again, this piece is not judgmental; it just raises some relevant questions.

The digital economy, over the last two decades, has spawned thousands of entrepreneurs, products and companies. Entrepreneurship has never been celebrated like this before. It is almost as if ’the bug’ is the new peer pressure.

One often reads about or converses with people who had the guts and patience to step out of comfort zones and tread new paths. We look at them with respect and admiration. Yet, many times, one is left with some questions about entrepreneurship as well.

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A recent conversation with a smart young man seeking career opportunities with us triggered some of these questions. He had spent a couple of years in corporate life before he was bitten by the entrepreneurial bug. He built a dotcom and wound it up in seven months as its relevance was slowly ebbing. He then built a product and sold its rights in about 18 months since he thought it wasn’t making any headway. Rich in experience, he now wants to learn more from a stable corporate framework before setting out on his own again. His courage and efforts are certainly commendable, despite the outcome.

However, where is the motivation coming from? According to him, it stemmed from how he could have ‘created more value’ as opposed to what he would have earned in the corporate life.

So what is this value creation? Is it only about the potential money one would earn if the company gets valued based on some future income? Isn’t ‘valuation’ and ‘selling’ becoming the primary motive before one even begins ‘building’?

It is this ‘value-creation’ narrative that has now become very common. It hopes to get created from dotcoms and product ideas that have no consumer validation or don’t come from meeting a consumer need. For instance, think of an app that will let you know how many of your friends in the radius of 3.8 km are polishing their shoes at any moment. Whether it is an industry-defining, clutter-breaking product is anyone’s guess.

Shouldn’t value creation be of about building businesses founded on real needs, delivering benefits for all stakeholders and margins that can sustain the health of the business?

Which makes me wonder - has the digital economy created a wrong narrative for ‘value creation’? Or am I being too nave?