The goal of creating a product is to create value. Business leaders often move away from their goals of creating value to extracting value. We find this situation in so many places, from early stage startups to large companies, for both new and existing products.
Creating a new product also includes an in-built monetization strategy that allows a business to extract some of the value created, sustain and invest in creating new products. The problem is too many businesses spend too much time on extracting value, and not nearly enough time on value creation.
The problem usually occurs after a product is successful accepted by its customers . The product team is often spending their time chasing incremental features, building minor enhancements, fixing bugs and doing some optimizations. None of which typically creates much new value. At best they help to preserve some value, but mostly they are about extracting that value.
The key to keep in mind is that the very best thing the product team can possibly do to facilitate extracting value is to create value – as much as possible. Create products that are compelling, sticky, and engaging – the kind of products that your customers could not live without. Make the job easy for your pricing specialists and your sales people.
The bottom line: focus on value and always create more value than you capture.