This is a story about creating things that never existed before. It's a story about people and how they best come together to build things that have value. Whether in companies or at nonprofit organizations, in political economies or via informal associations, this story is about successfully governing the interactions of those who take risks in the pursuit of value.
My journey toward a better understanding of how value is created began when I was 10 years old. Back then, wanting to teach me the value of investing and how the stock market worked, my father purchased 50 shares of a company called Texaco in my name. Every week we'd look up its price in the Wall Street Journal and, sure enough, this stock's worth grew over time. I noticed that it went up and down in price—sometimes for what seemed like extended durations. But mostly the value increased. This father-son activity of tracking the fluctuations of stock market prices, his explanations about why they happened, and the fact that—through no work on my part—the holding seemed to magically make money, intrigued me. I was hooked.
Building companies that see their stock prices go up is one way in which value is created. But, value creation goes well beyond stock prices. In fact, it can happen whenever we deliver a product, service, or idea that is valuable to the members of our network, many of whom embrace diverse measures of what constitutes value. This may sound like a tautology, but it's not that ...