Mopsos

I had a very interesting discussion yesterday with Olivier Réaud from inPrincipo consulting. We were arguing over the valuation of intangibles, and Olivier came with this very simple idea that tangible assets eventually boil down to money, and intangible assets to brands.
This triggered a connection with a discussion I had with Lee Bryant in London last november. We were discussing business models -how to make money with online social networks and communities- trying to move away from the consulting fees model or the software licensing model. Networks and communities do have a tendency to live a life of their own that may eventually diverge from the original intent of their sponsors, which happens quite often. My thought at that time was that the media/publishing industry offered a clue. Publishing a collaborative web site created by a community looks like publishing a book written by some author. Money should come primarily from royalties of derived products or services.
That's where the brand comes in. Let's imagine you build an online user group community on behalf of your company who pays for the associated costs. Let's imagine it worked nicely, but that community members are focusing on topics of little interest for the company, or that the focus of the sponsoring company has moved elsewhere, which comes back to the same. What do you do? One is to let it die. Another is to keep investing: Find new sponsors and build the brand. In the end, you may not own much in terms of tangible assets. But what you may end up owning is the brand itself and the trust attached to it. And that can be traded quite nicely if the brand is as famous as YouTube or Coca-Cola.

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