One Simple Concept That Keeps Artists Poor And Bankers Bored

Peter Thiel’s notion of value creation and capture is simple and profound:

Creating value is not enough — you also need to capture some of the value you create.

Most of us are better at one than the other.

The struggling artist is high in value creation, low on value capture. The rent-seeking elite is high in value capture and low on value creation.

This tension is only possible because generating value and capturing it are different skills, altogether. It’s why companies have various departments, with people of varying emphasis. Marketers and developers. Writers and graphic designers. Financial officers and business development folks.

A business generates X amount of value, and captures Y% of it.

That’s the equation, just two variables to track. When you are an independent creator, the difficulty lies in balancing both.

Failure To Capture

The muse is a force of generativity. It wants us to create. To bring valuable things into the world, then to share them with others.

This mode of creation is far from frugal. Rarely a rigorous or strategic planner.

It is of the moment. Happy so long as the product is true and noble and courageous. It is the mode most of us would like to spend our time in as creators.

But the generative, honest, vulnerable nature of creative expression does not guarantee value capture. When we do not distribute, promote, price or retain, our captured percentage of value will always be low.

If you are producing often and well, but still struggle to sustain yourself, chances are it is a capture problem — nothing more nor less.

Failure To Create

There is another side to it, of course.

When all we do is capture value, we are not builders. If all we do is leverage the creative efforts of others, we are rent-seeking. If all we make is at the orders of others, we are the ones being leveraged.

And while it may do well to fill the balance of some accounts, we will ultimately be bankrupting ourselves in others.

Photo by Marcus Lenk on Unsplash

When we spend too much of our time capturing, we lose sight of what matters. We chase the values of others; we judge ourselves by numbers that either go up or down. Eventually, the evening rolls around, as it always does, and we ask with the same candor as ever, ‘What’s it all for?’.

This is what it feels like to live for the weekend. Trading time for money.

When we only capture, we degrade the spirit. We feel empty. As though we are not truly contributing and therefore not a noble participant in this whole shared experience.

If you are earning well, but feel uninspired and bankrupted in other domains, it is likely a value creation problem — nothing more nor less.

3 Ways To Get Better At Creating

  1. Be generous. Give things away for free. It feels wonderful and inspires more generativity;
  2. Have a draft space that no one will ever see. Use it for the unfiltered parts of your mind, then read it back to yourself daily, courageously;
  3. Ask whether what you’re producing today will inspire you, 1 year from now, to keep creating.

3 Ways To Get Better At Capturing

  1. Dedicate time to planning and strategy;
  2. Listen to your audience and what they tell you they want more of. Not because they are the only input, but because they matter;
  3. Research what successful creators in your domain and ecosystem are doing to capture value for themselves. Effective value capture methods are almost always domain and channel-specific — be wary of universal advice.

Happy balancing.

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Gerrard + Bizway AI Assistant

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