24 Assets

Key Takeaways

1. Assets, Not Just Effort, Drive Income

Income follows assets.

Beyond Hard Work. It's a common misconception that hard work alone leads to financial success. While effort is necessary, it's the underlying assets that truly generate income. A salesperson working for a respected brand will make more sales than someone with the same skills working for an unknown startup.

Asset Examples:

• Traditional assets: property, shares, equipment
• Digital assets: intellectual property, brands, products, systems, software
• Soft assets: brand reputation, customer database, methodologies

Focus on Asset Creation. Instead of solely focusing on sales and marketing activities, prioritize the development of valuable assets. These assets will continue to generate income even when you're not actively working. The quality of the asset matters more than the effort put into selling it.

2. Digital Assets are the New Gold

The assets that matter most are also digital.

Digital Age Assets. In today's economy, digital assets are the most valuable. These include intellectual property, brands, products, algorithms, websites, and systems. They are scalable, easily reproduced, and can reach a global audience.

Shifting Asset Focus:

• From land, animals, and crops (agricultural age)
• To factories, machines, and stock (industrial age)
• To intellectual property, brands, and digital systems (digital age)

Digital Asset Advantages. Digital assets can be experienced online, transferred as a file, or coded as an algorithm. The cost of reproducing them is negligible once created. They are also unaffected by your physical location.

3. Passive Income is a Myth; Build an Empire

Building credible assets.

The Illusion of Passivity. The idea of "passive income" is often misleading. Most so-called passive income streams require ongoing maintenance and effort. True wealth comes from building an "empire" of credible assets that generate income.

Empire Building:

• Requires active creation, acquisition, or inheritance of assets
• Involves continuous care and improvement of assets
• Is a long-term game, not a quick fix

Active Engagement. Instead of seeking to escape work, embrace the challenges of building an empire. This requires time, energy, creativity, and diligence. The assets you create will take you deeper into your industry, not remove you from it.

4. Entrepreneurship is Alchemy, Not Just Administration

Entrepreneurship is alchemy – the process of starting with nothing and creating something of value.

Creation vs. Optimization. Entrepreneurship is about creating value from nothing, while administration is about optimizing existing assets. Many entrepreneurs struggle because they focus on administration rather than asset creation.

Seven Steps of Asset Creation:

1. Discovery of value: Finding a problem worth solving
2. Oversubscribed value: Proving the value with sales
3. Gaining influence: Becoming known, liked, and trusted
4. Oversubscribed influence: Experiencing high demand
5. Formalization of assets: Turning what you do into scalable assets
6. Oversubscribed assets: Scaling with digital assets
7. Commercialization of assets: Profiting from your ecosystem

Focus on Creation. Entrepreneurs must focus on creating assets that can be optimized by administrators. This requires a shift in mindset from managing tasks to building value.

5. Shift from Profit & Loss to Balance Sheet Thinking

Income is inextricably linked to the underlying assets.

Beyond Short-Term Gains. Small businesses often focus on profit and loss, obsessing over sales and cost-cutting. Big businesses, however, focus on the balance sheet, prioritizing asset development.

Profit & Loss vs. Balance Sheet:

• Profit & Loss: Focuses on income and outgoings
• Balance Sheet: Focuses on assets and their utilization

Asset-Driven Decisions. Instead of asking how to generate more sales, ask what assets need to be developed or improved. Treat problems as "asset deficiencies" rather than sales or cost issues.

6. The 24 Assets: A Holistic Business Ecosystem

There are 24 assets a business needs to develop, and this ecosystem of value produces scale, robustness and enjoyment.

Ecosystem of Value. A valuable business is not built on one thing, but on an ecosystem of 24 assets across seven categories. These assets work together to create scale, robustness, and enjoyment.

Seven Asset Categories:

1. Intellectual Property
2. Brand
3. Market
4. Product
5. Systems
6. Culture
7. Funding

Holistic Approach. Focus on developing all 24 assets, not just the ones you're naturally good at. This approach removes the need for intuition and prioritizes what to improve in your business.

7. Positioning, Channels, and Data: Market Mastery

Having a strong foothold in your marketplace follows assets.

Beyond the Abstract Market. A market is not a nebulous mass of people, but a collection of individuals with unique needs. Businesses that "own their market" treat customers as individuals and create solutions that perfectly match their needs.

Key Market Assets:

1. Positioning: Occupying a clear, unique, and advantageous position in the mind of your potential buyers
2. Channels: Having convenient ways of reaching people
3. Data: Using data to cater to people as individuals

Personalized Relationships. Data is the key to personalization, and personalization is the key to owning the relationship with someone. Collect data to customize and predict what your customers will want.

8. Product Ecosystems: Gifts, Prospects, Core, Clients

Delivering consistent value to clients follows assets.

Beyond Physical Items. A product is more than its physical components; it's a replaceable and consistent way of achieving a desired outcome. Great businesses have a product ecosystem with four types of products.

Four Product Types:

1. Gifts: Free products to capture attention
2. Products-for-Prospects (P4P): Low-cost products to build trust
3. Core Product: Main source of revenue, solving a problem fully
4. Products-for-Clients (P4C): Product extensions, delivering ongoing value

Ecosystems Make Money. A single product rarely makes money; product ecosystems do. A business becomes highly profitable when it has a strong offering in each of the four categories.

9. Systems: Predictability and Scalability

Predictability follows assets.

Repeatable Processes. Systems make your business simple, repeatable, and predictable. Great businesses don't inflict problems and decisions on their teams unnecessarily.

Key System Areas:

1. Marketing and Sales Systems: Driving leads, sales, and referrals
2. Management and Administration Systems: Reporting, forecasting, and decision-making
3. Operations Systems: Ensuring customers get what they paid for

Technology and Human Oversight. Use technology and systems to do the heavy lifting for your business. Combine technology with human oversight for a powerful combination.

10. Culture: Attract, Develop, and Retain Top Talent

High performing teams follow assets.

Beyond Perks and Benefits. Culture is your ability to attract, develop, and retain highly skilled employees without overpaying. It's about the vision, values, and environment that make people want to work for you.

Key Culture Assets:

• Documented role descriptions
• Accountability/organization chart
• On-boarding process
• Team handbook
• Training videos
• Structured performance reviews
• Ongoing training and development programs
• Remuneration and rewards structure
• Disciplinary and complaints policy
• Flexibility policy
• Communications tools, maxims, and decision-making guides
• Key performance indicators

Four Types of People:

1. Key People of Influence: Leaders, figureheads, and rainmakers
2. Sales and Marketing: Driving leads and sales
3. Management and Administration: Ensuring smooth operations
4. Technicians: Delivering the products and services

11. Funding Assets: Access Capital on Your Terms

Accessing funding for your business follows assets.

Beyond a Good Idea. To access funding, you need more than just a good idea; you need independently produced documentation. Investors want to see proof of value, ownership structure, and serviceability.

Key Funding Assets:

1. Business Plan: Defining where the business is heading
2. Valuation: An independent assessment of the business's worth
3. Structure: The legal and organizational framework of the business
4. Risk Mitigation: Assets that protect the business from harm

Professional Documentation. Use reputable firms to create your business plan, valuation, and legal agreements. This adds credibility and increases your chances of securing funding.

12. Environment Dictates Performance: Choose Wisely

Environment dictates performance.

Beyond Personal Development. Success is less about individual traits and more about the environment you're in. Find an environment where it's normal to achieve your goals.

Four Elements of a High-Performance Environment:

1. Access to current best practices
2. A peer group to normalize high standards
3. External accountability and consequences
4. Access to resources

Choose Your Environment. Be intentional about the environments you choose. Surround yourself with people and resources that support your goals.

Last updated: February 17, 2025

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