Data Driven Decisions

Chapter 10What Intangibles Matter Most for Corporate Expansion

Until now, we have focused on the impact of intangible assets on corporate valuation and on how intangible assets can be further explained or understood using systems engineering tools. We have approached primarily from the perspective of an investor and what results they look for in terms of a firm's tangible and intangible assets because corporate valuation is fundamentally a negotiation with purchasers of ownership stock or business debt.

There is another important negotiation that is constantly happening, and that is the negotiation between a company and its customers. That is why no work on corporate valuation would be complete without also taking a deeper look at corporate expansion.

The motivations of an investor who purchases the stock or debt of a business are different from the motivations of the customer who uses its products. Corporate expansion is only possible as customer demand for those products increases. I cannot tell you how many times, in my experience of working with business owners across the world, they fail to understand the nuances that differentiate the customer from the investor. CEOs and business owners who have become very successful and have scaled businesses, however, tend to understand very well what customers want and how to communicate value to them.

Talk to any CEO of a successful company, and you will find they are invariably extremely eloquent in all things related to their customers, ...