When Building Isn’t Enough: Lessons in Value Capture from the Frontlines (in Cloud and AI)

The market is moving at breakneck speed.

Post-COVID shifts, the acceleration of AI, changing consumer expectations — it’s all creating a current that many businesses find hard to keep up with. Innovation is everywhere, but commercial traction? That’s another story. And in the rush to ride the wave, not everyone’s winning.

We’ve seen technically brilliant products and services that could genuinely shift an industry fall flat. Not because they weren’t smart, but because they lacked the engine to get them off the runway and keep them in the air. On the other hand, we’ve watched simpler, less groundbreaking offerings take flight (and sometimes shoot right for the moon) simply because they met market need and were built with sharper commercial models, stronger distribution, and a strategic moat that protected them from competitors.

Why Creating Value Isn’t Enough

One of the lessons I’ve learned is that value creation alone doesn’t guarantee success. It’s just a start. When you build something of value, that’s backed by market demand, the other key consideration is how you set the stage for that value to be recognised, monetised, and protected over time.

I’ve come to believe that one of the most important roles of a modern tech leader is to create a culture of value capture. That means building not just a great, innovative product or a service, but an ecosystem — a story, a go-to-market engine, feedback loops, and a commercial model that returns a meaningful ROI for the effort we put in.

Because if your model is fragile or you lose control of the value chain, it can be like a puzzle where someone pulling one piece out can break the whole thing.

What I’ve Seen Work

1. Cross-functional thinking from day one.
Before we build anything, we should be asking:
– What customer problem does this solve? Will the problem still be there for these types of customers if technology shifts in 12 months?

– Is that a real problem users/customers will pay for to solve?

– Can we build a commercial model that caters for a fast speed of innovation (e.g changes to the tooling/components, while still delivering the same product or outcome?).

– Do the sales teams want to sell this? How does it help them hit their numbers?

– Why would our distributor (if we have one) want to sell it? How does it make them successful?

2. Strong exec sponsorship.
You need leadership buy-in, not just from your own org, but from your channel, distributor and/or partner/supplier orgs too. Ideally from your first couple of customers as well. Make it their success story, not just yours.

3. Co-design with customers.
Involve customers early. Let them see the commercial model. Invest in a proof of value. If the customers understand the inputs, they’re more likely to back your pricing — and so is your sales team and your distributor.

Strategy 1: Distribution Is as Important as a Great Product

I’ve been mentoring NZ businesses lately, and this theme comes up again and again: Great products don’t always win, but great distribution combined with a great product almost always does.

Especially under $20M revenue, teams are stretched. Founders are visionaries and product builders…but sales? Sales is hard. Getting in front of the right customers, with the right story, at scale? Proving that you can not just make it, but sell it? That’s a whole different game.

Here’s the catch: distribution often means giving up margin. And that’s where a lot of founders and leaders hesitate. But in my experience, building distribution cost into your model early makes you sharper. You’re forced to differentiate, to be clear on your value, and to build something truly worth selling. And not focusing on selling means you get more time in your day to develop your product. This is true in the Cloud as well as more traditional industries such as Food & Beverage or durable goods.

Lesson: The best product doesn’t always win. The best access to customers (in combination with a great product) does.

Strategy 2: Bundling and Platform Power

AWS didn’t invent Linux, MySQL, or Redis. But it made billions by bundling them into scalable, secure, cloud-native services. They offered convenience, trust, and integration.

Closer to home, I’ve seen accountants turn one-off tax jobs into year-round subscriptions by bundling compliance with forecasting, Xero advice, and strategic support. They’ve shifted from “cost” to “partner” — and customers seem to be sticking around.

Slack is also a good example. A few years ago, it still had the better product. But Microsoft Teams had the better platform and value for Enterprise market. Bundled with Microsoft 365 — and that was enough to win 30%+ market share in the US. Slack sits at under 20%.

Lesson: Bundling transforms perception, improves value and in some cases unlocks pricing power.

Strategy 3: Consolidation and Market Power

Market consolidation is reshaping industries. The companies that win aren’t always the most innovative, they’re often the ones with the clearest moat and best position in the value chain.

Take Visa and Mastercard. They went well beyond building the best payment system. Their mote comes in a global network so entrenched that it’s nearly impossible to replace. Their pricing power comes from sheer ubiquity, and the fact that customers and merchants have few real alternatives.

Lesson: Operating within a highly consolidated ecosystem (for example a company building solutions that integrate with VISA) has a massive upside but also some major risks. Making the space to assess these risks and commercial dependencies is equally as important as driving for growth.