The difference between value creation and value capturing.
Why do some companies stop innovating? Marty Cagan and Lenny Rachitsky say something truly logical on Lenny’s podcast which got me thinking.

I was always wondering “Why doesn’t Company X or Y innovate anymore?”

Marty Cagan and Lenny Rachitsky say something truly logical on Lenny’s podcast which got me thinking.

“So many companies after the founders leave are scared. They’re literally scared. Because they don’t know what is essential and what is incidental.

They’re scared they’re going to hurt the thing that’s fueling the business.”

Lenny sums it up in a very emotive way as a quote.

“Things are going well, let’s not break anything. Why launch something risky and new, and why not just keep selling this thing that everyone seems to want?”
– Lenny on Value Capturing

Value Capturing is optimization to stay afloat.

Many companies are aware of the fast pace of our technological world. All the more they want to protect their generated value.

I believe that this also affects companies where the founder is still there. Not all success is due to intentional management.

So many companies start by focusing on activities that are low risk.

• Setting up A/B tests.
• Tweaking workflows.
• Optimizing retention.
• Building growth tactics.

It’s important to note that those can improve the product if done right.

However, they will not provide fresh innovation that might be important in the long run.

Value Creation is discovery to innovate.

Discovery gives companies the ability to continuously discover new opportunities.

New opportunities that build on the existing product to create value for users in a way that returns value to the company.

Your company should do both!

A mindset and the right framework for continuous discovery activities running alongside capture activities is critical for most companies to survive.

“[Value creation activities and Value capturing activities] are both great, absolutely. You should do both.” Cagan says. “But once [companies] stop doing real discovery, to me, it’s just the beginning of the end.