Leveraging Social Assets

by Jay Deragon on 08/08/2011

We all possess assets whether owned, controlled or used to produce more value. Businesses consider human capital as an asset. Have you ever heard a business manager express an individual’s value as an asset to the organization?

Organizations leverage human capital to produce economic gain. Organizations produce products and services considered as assets for consumption in exchange for economic return. Human capital is used to create, distribute and exchange the organizational assets for economic gains.

Collectively organizational and individual assets are often underutilized. Underutilized assets represent significant value yet realized or optimized to their fullest potential.

Leveraging Assets with Social Media

When you think about all the conversations happening on-line one could consider the content as an asset. The same consideration could be given to individual and organizational profiles contained within all the social networking sites. In essence people’s conversations and profiles represent assets ready for use in one form or another. Yet most organizations do not account for these assets on the balance sheet.

Assets are economic resources. Anything tangible or intangible that is capable of being owned controlled or used to produce value. Traditionally we think of assets as tangible things like products, inventory, technology, sales, cash flow, capital, earnings etc. etc. Yet none of these things could be valued unless there was some human interaction, consumption or engagement with those assets. Facebook, Twitter, Linkedin and other “social platforms” are creating significant market capitalization, value. The only thing physical about any of them are the technology and people who manage the technology. In essence social technology leverages human interaction, communications, with technology to create value, assets.

The things we are learning about social media are not about making money from social media rather the means of creating economic value from social currency. Social currency represents information leveraged and shared which encourages further social encounters and each encounter creates social value. Social currency, and the value it represents, is a social system which points to financial gains (assets) created by innovation. Part of the innovation we are witnessing is people are learning to leverage assets by reducing friction then exchanging new value with others like never before.

Leveraging Assets without Debt

In the traditional sense leveraged assets are used to fund a company or business unit with more debt than would be considered normal for that company or industry. More-than-normal debt implies that the funding is riskier, and therefore more costly, than normal borrowing. We are not talking about this kind of asset leveraging.

Social media enables people and organizations to leverage assets without any debt obligation. What do we mean?

The cost of social media is free yet leveraged correctly it produces significant social currency that converts to economic gains. Example: Blendtec leveraged their product (an asset) on a YouTube channel titled “Will It Blend” and captured over 9 million views and the social currency created a seven fold increase in sales.

The above example is but one of hundreds emerging as a new way to leverage assets. However there are even more profound ways in which entrepreneurs are learning how to utilize other people’s assets to create economic gains. Consider Groupon which is a coupon promotions site that leverages other people’s assets, products and services, at discount prices to a market of willing consumers.  Participating firms report more sales than they can handle.

Now the game will be about learning new ways to leverage our own and other people’s assets for economic gains. Like what?

  1. An entrepreneur leverages a sporting event to create value for local merchants by creating coupon incentives for fans to buy transportation, food and lodging to the event. The savings from related activities and engagements reduces the cost of the ticket to the event to zero. The entrepreneur makes a commission off every sale. The assets leveraged were the event with the related product and service offerings all promoted via social media. The social value created economic returns for everyone involved.
  2. An entrepreneur leveraged empty seats on private jets by selling the seats to people who self aggregated their intentions to travel. Related lodging, transportation, entertainment and food service companies threw coupon incentives to those traveling. The jet operator filled their plane, the related merchants gained revenue, the passengers saved time and the entrepreneur made a commission off all sales. The entrepreneur nor the jet operator and merchants had to take on any debt. Social media created the messages to affinity audiences who shared the experience with friends.

The examples are only as limited by one imagination and creativity.

Assets represent value that can be leveraged and converted to social value which leads to economic gains. Get it? Then start leveraging.

{ 4 comments }

titus March 7, 2013 at 12:22 am

what exactly is the definition for social assets?

Virtual Office August 10, 2011 at 4:15 am

A website is arguably one of the most important assets of the company. An important factor which works in favour of Social Media to build your business brand is the high amount of visual appeal.

Kevin Mogavero October 29, 2010 at 12:34 am

Jay,
Great article! Not only are these great ways to leverage existing assets that you don’t own, but it’s a great way to exponentially expand your network as well. As long as you operate with integrity, your opportunities will grow exponentially with your network… Very smart. This is my first time to your site, I like you guys!

Dan Robles October 28, 2010 at 12:09 pm

Jay; I think you hit on something important. Leveraging assets without debt is a breakthrough concept. The fractional reserve system allows banks to distribute 9-10 times more debt in a community than the bank actually has in deposits. If we were all Banks, we should be able to distribute 9-10 times more value than we actually possess. If you walk into a classroom, that is exactly what you see; a person leveraging their assets 20-30 times. You see the same in mentorship programs, volunteerism, and some social networks. Think about what that resolves to

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