Seth's Blog : Extraction or generation

Extraction or generation

If you buy a coal mine, the business model is simple: dig out as much coal as you can economically justify, then walk away.

On the other hand, the model for a brand or a community or a movement is to relentlessly generate value, connection and possibility. Growth can be sustainable and occasionally exponential.

Too often, we slip into the lazy mindset of extraction. Take a great brand and milk it as it fades from neglect. Stop reinvesting in assets because it’s cheaper in the short run to simply take profits. Coast on a hard-won reputation because it feels safer.

When we wring our hands about private equity ruining organizations, it’s mostly because they often follow the lazy and fearful path of extraction instead of committing to generating something new.

Sometimes, extraction is our best option. But it probably pays to call it that to eliminate frustration and confusion.