Over the last decade, the tech industry has seen a shift towards prioritizing value extraction over value creation. Companies are increasingly focused on maximizing profits, often at the expense of the user experience, their customers' wellbeing, and broader society. Long-term value creation has gotten swallowed by short-term metrics juicing, inserting middlemen when none are needed, and disrupting sectors by undercutting them using VC money. This trend has led to a growing sense of dissatisfaction among consumers, who increasingly feel like they are being taken advantage of by tech companies that only care about making money. Users feel like they’re getting ripped off—because they are. The tech industry has lost sight of its core mission: to use technology to create products and services that improve people’s lives.
Value extraction is a short-term strategy that ultimately hurts both the company and its customers. Instead of focusing on creating products and services that solve real problems and provide genuine value, companies that prioritize value extraction look for ways to monetize their users at every turn. This can lead to a variety of negative behaviors, such as deceptive or relentless advertising, excessive data collection, what-should-be-standard features becoming paid, and the creation of addictive products that keep users hooked but don’t really improve their lives.
The biggest driver of value extraction in tech is the pressure from investors and Wall Street to generate revenue and profits quickly. Investors often demand fast returns on their investments, and companies may feel like they have no choice but to prioritize monetization over everything else. This may be a Sisyphean task, but companies need to enlighten investors to take a more balanced approach that prioritizes user experience and value creation. This may mean accepting lower returns in the short term, but it can lead to better long-term outcomes for both the company and its investors. Apple did this. Google at one time did this. Few seem to be doing this now.
It is the job of designers to shift the focus back to value creation. No one else on our product teams is incentivized to do it. It’s just us. This means placing a greater emphasis on designing products and services that truly serve users’ needs and interests, rather than just generating revenue. Companies need to make money in order to survive, and there’s nothing wrong with charging for a product or service that provides real value to customers. The problem arises when companies prioritize monetization over everything else, to the point where they are extracting more value from users than users are receiving in return. This, in turn, can lead to poor user experiences, customer churn, and damage to the company’s reputation. Profit should be the by-product of providing real value, not an end unto itself. Too often now, this isn’t the case.
So how do we designers create long-term value? We do what we always do: focus on user needs and future opportunities. This doesn’t mean ignoring near-term goals (often set by Product Managers and executives) but it does mean having a more long-term, strategic vision for the product and being able to ideally scrap or, if not, translate cash-grab requirements into (at a minimum) a more tolerable user experience and, at best, something that simultaneously generates value for users. This is something worth arguing for. This is something to debate numbers and resources over. “We can do this, but it will slow down progress on [a more user-valuable feature] that will increase adoption by 3%.” This is something to debate product strategy about. “If we do this [short-term monetization] now, it will hinder us in the future to do this [long-term product goal].”
No one is going to want to hear this.
Creating long-term value requires a culture of risk and innovation. Designers must be willing to experiment, take risks, and push boundaries. This means creating an environment that fosters creativity and curiosity, where failure is seen as a necessary step on the path to success. It’s a culture where the integrity of the user experience is at a premium, and defending it—or completely overhauling it if it no longer provides enough value for users—is a key function of design. Charles Eames said “95% of the effort” in design was in keeping a concept from falling apart. In today’s world, that effort is keeping the user experience from degrading to a point where it takes too much struggle from users for too little value.
No one is going to want to hear this either.
When I was in grad school, the late designer John Rheinfrank sat in on one of the classes. When one of the students asked what his job was, he replied, “Trickster.” When asked to elaborate, he said, “My job is to trick companies into doing the right thing.” Designers, yours is too.
I wrote this with help from ChatGPT.