The Intangible Asset Chain for Start-ups

Consensio has specialised in start-up brands for the local Australian market since 2001. It is evident that successful start-up brands undergo a process of intangible asset development, ideally underwritten by everyone in the organisation.

Parts of the organisation traditionally dealing in ‘tangibles’ are the finance and sales departments. HR and Marketing are the domain of the intangible asset.

The process of developing a linear intangible asset chain can be described in this model. They are presented here as linear, because in my experience, setting them in random order is not creating sustainable competitive advantage in the long-term. Step 3 to 7 are intrinsically linked and are more like layers than consecutive steps as they are initiated simultaneously.

intangible asset chain

1. The process of naming the company
2. The process of trademarking
3. The process of defining the corporate identity
4. The process of inducting employees to the corporate identity and marketing strategy
5. The process of product/services development
6. The process of defining the target market and target demographics
7. The process of communicating with internal and external stakeholders
8. The process of determining brand equity

It was my observation that if the start-up company had not followed through with the linear building of this intangible asset line, sales were either stagnating or did not attract the appropriate buyers if the company tried to employ a price skimming strategy.

Premature investment in corporate identity creation before the naming process or product development before the research into target markets led in all instances to reconsideration and further financial and time investment.

Research has found that adequate financial resources help secure the tangible side of things on which intangibles can be build. Increased development funding is a start-up competitive advantage, because augmented financial resources are used to increase firm assets (Lee, Lee, and Pennings 2001, 619).

However, consider that, simply possessing resources does not translate them into value (Priem and Butler 2001). Firms achieve value creation by gaining, combining and utilizing resources (Grant 2002).

It is therefore important to map out the steps on how to create their intangible asset chain when start-up businesses of any industry enter the market. For more information and a graphic of the Consensio Intangible Asset Chain, please contact Consensio or leave a comment.