Why I Want to Build a Productive Business, Not an Extractive One
A business should become wealthier because it creates more value for society, not because it becomes better at extracting value that already exists.
Lately I've been thinking about business models, pricing, and what a business should actually optimize for. Most discussions begin with revenue. Mine begins somewhere else. Where should a company's revenue come from? To me, the answer is simple. A business should become wealthier because it creates more value for society, not because it becomes better at extracting value that already exists. I think somewhere along the way we've drifted away from that idea.
In The Wealth of Nations, Adam Smith famously described a small pin factory to illustrate the power of division of labor. By breaking production into specialized tasks, a handful of workers could collectively produce vastly more pins than if each worker tried to make entire pins from start to finish. Society became wealthier not because prices changed, marketing improved, or customers became easier to persuade, but because human productivity increased. More value was created from the same amount of labor. That idea has remained influential for more than two centuries because it captures something fundamental. The most sustainable way for a business, or an economy, to become wealthier is by creating new value.
Unfortunately, I think we've gradually drifted away from that principle. Many modern businesses have become extraordinarily good at extracting value instead. Advertising persuades us to buy things we otherwise wouldn't. Lock-in makes switching expensive. Monopolies reduce alternatives. Information asymmetry shifts bargaining power. Sophisticated pricing strategies optimize willingness to pay rather than value creation. None of these necessarily make society more productive. They simply improve a company's ability to capture a larger share of existing value. I think there is an important distinction between productive businesses and extractive businesses, even when both are highly profitable, and I believe we should build more of the former while becoming much better at recognizing and limiting the latter through competition, transparency, consumer awareness, and good laws.
A recent experience made this distinction feel very concrete. I recorded a video using an online editing platform. Only after I had finished recording did I discover that downloading my own video required purchasing a $24 monthly subscription. The software absolutely created value and deserved to be paid. My criticism is not that it charged money. My criticism is that my own work had effectively become locked behind a paywall after I had already invested my time. Technically I could choose another platform next time, but that wasn't the choice I was facing in that moment. I wasn't deciding between competing products before creating my content. I was paying to regain access to something that was already mine. That feels fundamentally different from paying for additional value being created.
People often call this value-based pricing. I think that's an incomplete definition of value. In business literature, value is often measured by what customers are willing to pay. But willingness to pay is influenced by much more than value itself. Advertising, urgency, monopoly power, switching costs, habits, and imperfect information all shape purchasing decisions. Those factors affect prices, but they do not necessarily create additional value. I'm interested in something closer to the actual value a product or service creates in someone's life: the lasting improvement that would not have existed without it.
That philosophy has shaped how I'm thinking about AllNutrition.
Imagine someone uses the platform for six months. They learn how to evaluate nutrition claims more critically. They develop healthier habits. They lower their cholesterol. They avoid misinformation. Or perhaps nothing dramatic happens, but they simply become more confident making evidence-based decisions about food. I don't think I can accurately determine what those improvements are worth to that individual. I think they can.
Instead of asking someone to pay a fixed price before they know whether a product or service creates meaningful value in their life, imagine letting them experience it first. After several months they answer a single question: How much value did this actually create for me? Their payment is not a donation or a gesture of goodwill. It is simply the price they assign to the value they actually received. Someone whose life changed dramatically may happily pay far more than a fixed subscription would have cost. Someone who received modest value may pay less. The payment follows the value instead of preceding it.
The obvious criticism is that some people will exploit the system. Of course they will. Some people will forget. Others will know they benefited and intentionally choose not to pay. I don't think any pricing model eliminates bad actors. My intuition is simply that they are a minority, and more importantly, I don't think the system depends on policing them. Markets themselves work because millions of independent decisions collectively produce useful signals. I think something similar happens here. The wisdom of crowds suggests that while individual judgments are noisy, biased, or occasionally dishonest, the average judgment of a sufficiently large number of independent people often converges surprisingly close to reality. If people primarily discover a product because it genuinely improved someone else's life rather than because they were persuaded by advertising, then the average amount they voluntarily choose to pay may become one of the best available estimates of the product's actual value.
Maybe this model wouldn't work. Revenue would certainly be less predictable than subscriptions or traditional upfront pricing. Some people would always pay less than the value they received. But I also think we've become so accustomed to subscriptions, fixed pricing, and paying the full amount before experiencing a product or service that we've stopped questioning whether those models actually produce the strongest alignment between value creation and revenue.
I don't know whether this idea scales. I don't know whether I'll succeed in building a business this way. But I know it's the kind of company I want to build. I want my company to become more successful only when it creates more value for other people. To me, that's not an alternative to capitalism. It's capitalism working the way it was always supposed to.