Building Assets in a Startup

I’ve been thinking a lot this week about building assets, especially how it relates to my startup, ShelfMade.net. Any time you are in the initial stages of a starting a business, things seem simple. “Here is how we are going to make money.” As you progress further towards that first dollar in revenue your perception begins to change a bit – it’s probably called experience.

When starting out you see the transaction, and at the beginning an interesting transaction is all that is needed. For ShelfMade the transaction means people Shelving articles online and purchasing a magazine that includes those articles. This transaction solves a problem for the customer. At ShelfMade we help people read interesting articles in a better form (print vs. computer screen) and for me personally it improved the way I surf the Internet – now I just find article online, which is easy, and I read them offline, which is also easy.

Although the transaction is the exciting part, I came to find out that we need to build many assets to make the transaction happen.

The first asset, especially in web startups, is the technology or website. For ShelfMade the website allows users to tag an article, save that article and have it appear in the next issue of their on demand magazine. In any case, this asset creates value, but it cannot work alone. Many companies stop at this step (no offense to the geniuses building great technology). If the idea is right, at this point you can sell to Google and they can use this technology to leverage their other assets. I think this is the plan that most startups have. Build an awesome tool (Writely for example) Google purchases and Google’s users now have an added feature. Brilliant!

Once the technology is built startups need to sell their way into a market or find that market, which is their second asset, a user base. To be fair, even if you plan on a quick sale you need to build some type of user base. The point that I am making is the bigger user base you can build, the greater the asset you own and the more valuable your company is. YouTube sold for much more than Writely did because of their community.

ShelfMade needs to build our market through individuals or communities like Meetup. For most tech companies having users and a product that users/advertisers will pay for is the name of the game.

What I really love about the ShelfMade concept is that we can (need to) build a third asset, supply. In this case our supply is a network of content that our users want to read, save and share. We need bloggers and content owners to opt-in and make their writings Shelvable so that users can include them in a personalized magazine. When all is said and done, I think this content network will be our biggest asset.

Of course what I really love about ShelfMade is that this content network has many benefits for content owners, not just our company. We are paying royalties every time an article is included in a magazine, we promote the content owners on our site, and most importantly their ideas will reach a wider audience through magazines. What we are building is a permission asset, not to market to people, but to help them spread their ideas.

So the takeaway here is to concentrate on building all of your assets not just one. It is easy to get hyper-focused building your website and then thinking that is the end game. Most companies need more than just a cool technology to be successful and you should be thinking about that from day one.

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7 Comments

Filed under ShelfMade.net, startups

7 responses to “Building Assets in a Startup

  1. ShelfMade is a brilliant concept in my opinion. Well done for turning it into a real product and good luck turning it into a real business.

    You’ve probably already thought of these but I think it would help adoption a lot if shelfmade were to be integrated with bookmarking services like delicious; feed readers like Google Reader; and the browser in the form of a toolbar. A stumble upon tie-in would also be great.

    By the way, is the service free to the user? If so I think you should make this prominent on your site. I imagine that you could generate highly targeted and personalised print ads based on a reader’s interests and therefore may not need to charge the user – excep perhaps for postage.

  2. Looks like a great idea, I will be awaiting the launch of this.

  3. Thanks for commenting. We are just building the beta, but we will eventualy be building in features with google reader, delicious and the like.

    Starting off, users will pay for the magazine, but hopefully once advertising kicks in the price will come down or eventually we’ll be able to give away the magazine. We have to see how the numbers work.

  4. Pingback: What are a Startup’s key assets? « FoundRead

  5. I enjoyed the article but I thought I would drop a comment to provide a trivial piece of advice. While I see that you use wordpress and I know how to find the RSS feed for a wordpress site I notice that you don’t have a ‘feed’ button on the page I hit first.

    I came to your blog (and heard about your site for the first time) via a links from FoundRead. I love the idea you’re exploring with your startup, and I’m willing to become a member of your community but I had to hunt to find the button.

    Just thought you might benefit from the usability tip. Best of luck!

  6. Hey Brian,

    Thanks, just so busy that I haven’t put a subscribe button (or blogroll) up yet. You are totally right.

    I use firefox and usually you can grab the feed from the URL window, but it isn’t natural and I only do that in the absence of a button on the site.

    Thanks for reading and the kind words.

  7. very interesting.
    i’m adding in RSS Reader

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