The Creative Business Model

I’d never used the word trichotomy until I wrote this. It sounds a lot like thoracotomy, as in, “thoracotomy tray, stat!”, the surgeon-to-nurse command that spiced up many a dramatic scene from the TV show ER. George Clooney probably shouted it a few times.

But trichotomy is like a dichotomy except it’s made of three, not two – a three-part paradigm. More on that below.

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One of the lies that SEO agencies commonly tell is that SEO is a “long-term game”. That it takes 6 months or longer to get results.

That’s really not true.

But as a strategic premise, it has essentially become part of the SEO agency business model. It’s lucrative because:

1. Absolves the agencies for non-results for at least 6 months
2. Allows, meanwhile, agencies to sell 6-months of execution work

Services business models are built on such strategic premises, some true, some false. Some once true and now false.

Whatever the case, they direct the allocation of execution work.

According to the prevailing view of the independent entrepreneur’s business model, you create value through two work types:

1. Strategy work
2. Execution work

All work is either one or the other. Take your pick. Or pick some combination thereof.

Here’s how the thinking goes around this:

• Strategy work is more valuable than execution
• Products are made valuable through strategic thinking; likewise, services are more valuable through strategic thinking
• If you’re an “outsider”, you start with execution then work your way into selling strategy work, which creates a greater value exchange
• Conversely, however, once you begin to sell strategy, you then sneak a little execution work to supplement your income
• In fact, if you adopt the agency or consulting firm model, you can make money by selling the (marked up) execution work of others
• If you really love execution work – building, crafting, writing, teaching, designing – then just do it and let satisfaction compensate for lesser financial compensation

A lot of this is true and good advice (except for the very last one).

The False Dichotomy

The points above are based on a false dichotomy, that of strategy vs execution. It’s false because it omits creativity, which doesn’t fit either category. This leaves us with a trichotomy: 

1. strategy
2. execution
3. creative

“Trichotomy tray, stat!”

Think of creative work as somewhere between the high-skill, stylized work of the craftsperson and analytical work of the strategic advisor. It’s similar to execution work but it’s not menial or repetitive. It’s similar to strategic advice but it’s a form of execution; you can’t do it unless you do it – a slogan for a new brand, the direction of a video, the decoration of an interior.

It might be that you create more value for clients by providing strategic advice. And it’s definitely true that any problem-solving venture should start with strategy. Strategy is still the leader. But is it where the most value is created?

Not in my experience.

Value-through-creativity is one of the fattest throughlines of my 20 years in digital marketing & advertising, technology consulting, UX design, and web/app/software development.

Whether it comes from engineers, writers, statistics/data people, or designers, creativity is sometimes where most value comes from.

How to read diagram: size of bubble denotes value created

Case Study

I once worked for a cryptocurrency entrepreneur who had gotten his logo from a designer on Fivrr for $5. That entrepreneur’s venture is – you guessed it – toast. There was no creativity in his business model. 

Compare that futile crypto venture to another business I worked for, Tiffany & Co.

They invested over $20 million dollars on web design and development over three years at the agency I worked at. And got a stunning ROI. 

Here was the strategy:

• let the online presence be as international as offline
• leverage a stockpile of extraordinarily high-quality images
• exploit an impeccable brand identity by pursuing a minimalist design
• embed share-with-friend features into the UI (this was rare then; it had to be designed and built from scratch)
• boldly pursue customers who were new to online shopping but lived far from retail locations (which were MUCH more rare back then, before Tifanny diluted its brand into McMall-type storefronts)

This was a great strategy. And again, I am not questioning the value of strategic work at all. But others could have come up with it. The execution work was also superb – but others could have done it. Where was the value created?

Creative work, both in engineering and design but led by a superb, interdisciplinary design director. That’s why the Tiffany.com website was one of the first ecommerce sites to hit 100 million in annual sales. That’s why the website UX has hardly changed in 20 years.

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Real quick on the product variant of digital expertise businesses – MySpace is worth $110 million in 2020; Facebook is worth $810 billion. 

So how did Facebook 8000x its former competitor’s valuation? Letting design thinking (a form of creative work) be part of the business model.

BTW, product business models and services business models are more similar than people think. 

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Pricing takeaway. Don’t let anyone underprice your creative work by telling you, that’s not strategy, it’s hands-work/implementation/execution. Not only is it neither strategy nor execution, it often creates more value than both put together.

But here’s the bigger takeaway – figure out how creativity is part of your business model.

My best
Rowan