Splitting this email up because it asks The Big Question at the end.
Dear Sean
You’re making the argument that people care more about the artistic side than the business side because the business side is dry and boring. That argument is true for some, but doesn’t tell the whole story.
By dismissing critics of the purely economic argument, you completely neglect the ethical side of this discussion: Does this product make the world a better place to live in? Does it do any harm?
Following your argument laid out in your recent quality/sales post, cigarettes have a higher quality than fruit (the former selling roughly four times as well as the latter). It follows that as an artist, I shouldn’t have any scruples selling my work for propaganda posters or cult recruitment if it sells better than other customers. Would you agree with that?
The premise you are putting out is that customers are stupid and will unknowingly buy things that will lead to their destruction. This idea was best illustrated with Prohibition that was actually put into the United States Constitution almost a hundred years ago. After all, drinking leads to many social problems. Wouldn’t it be a good idea to just get rid of it? That led to so much crime. There is a part of Human nature that some people do wish to drink away their life or whatever.
People know what cigarettes do to the body. Even kids know. But people smoke because they enjoy it. Professional golfers are, to this day, allowed to smoke cigarettes when playing (where everyone else cannot of course) because it soothes their nerves. (Cigarettes are a bad example since the state propaganda about them was more about interested in taxing them. If they as bad as politicians have declared them to be, they would have been banned.)
As I said earlier, customers are the determination of quality. Customers are the determination of ethics as well. When baseball had all the problems with steroids, did baseball attendance fall? No. So while some people had problems with it, the customers did not.
Is buying gold and items with real money a problem in games like World of Warcraft? Is it unethical? The customers think so which makes Blizzard think so.
Is cheating in my single player game unethical? No customer thinks so. So Blizzard allows that.
Are video games unethical? After all, they can cause great harm to a person’s life. But it is for customers to determine whether or not video games are ethical or not, not someone named Jack Thompson or some other non-gamer who is obsessed at controlling what other people do.
Who is any non-customer to define what is ethical or not for a customer? Where someone might find cigarettes unethical, many do not. There are people who think strip shows and drinking are unethical. But who are they to enforce that ethical standard on other people?
Your ‘ethics’ is nothing more than non-customers demanding what is ethical for customers. It is like a vegetarian shutting down the steak house or the non-smoker shutting down sales of cigars or the minister shutting down bars.
Customers define the value of products. They also define the ‘ethics’ of that product too.
I think this is a point of confusion because people confuse marketing with brainwashing (which it isn’t). All marketing does is bring attention to the product. If the product sucks, like Wii Music did, no amount of marketing can sell it.
The question is: What is the purpose of business? Is it to create value for individuals clever enough to understand it? Does it serve a societal purpose, such as increasing quality of life, furthering freedom, health, and human expression? Or doesn’t it have a purpose other than sustaining itself, a “memeplex” behaving like an organism trying to survive?
To answer this, I have decided to summon the spirit of Peter Drucker to this blog post. Peter Drucker, how are you?
“I am fine, Malstrom. How about you?”
There is someone here who wishes to ask you a question.
“OK. What is it?”
The question is, ‘What is the purpose of business?’
With a smile, Peter Drucker answers:
To know what a business is we have to start with its purpose. Its purpose must lie outside of the business itself. In fact, it must lie in society since business enterprise is an organ of society. There is only one valid definition of business purpose: to create a customer.
Markets are not created by God, nature, or economic forces but by businessmen. The want a business satisfies may have been felt by the customer before he was offered the means of satisfying it. Like food in a famine, it may have dominated the customer’s life and filled all his waking moments, but it remained a potential want until the action of businessmen converted it into effective demand. Only then is there a customer and a market. The want may have been unfelt by the potential customer; no one knew that he wanted a Xerox machine or a computer until these became available. There may have been no want at all until business action created it—by innovation, by credit, by advertising, or by salesmanship. In every case, it is business action that creates the customer.
It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. What the business thinks it produces is not of first importance—especially not to the future of the business and to its success. The typical engineering definition of quality is something that is hard to do, is complicated, and costs a lot of money! But that isn’t quality; it’s incompetence. What the customer thinks he’s buying, what he considers value is decisive—it determines what a business is, what it produces, and whether it will prosper. And what the customer buys and considers value is never a product. It is always utility, that is, what a product or service does for him.
The customer is the foundation of a business and keeps it in existence. He alone gives employment. To supply the wants and needs of a consumer, society entrusts wealth-producing resources to the business enterprise.
