A professor at NYU Stern, Aswath Damodaran argues a brand is the most sustainable competitive advantage in the market place. He defines a brand as the power to command a price premium over a comparable, competitive product.
Many of our portfolio companies are in the midst of discovering the importance and challenges associated with building a brand. It is a long term process of exhibiting expertise, presence and uniqueness in a community. Active brand management is an essential skill for CEOs. At At the very earliest stages, the CEO is the brand and in a few cases, the CEO remains essential to the brand.
Brands accrue tremendous, if unquantifiable, value because brand recognition facilitates business development, decreases costs of sales and ultimately, if Professor Damodaran is correct, should provide pricing power in the market.
Building brands is a long term effort and is beyond the scope of this post but, Jeff Bezos captures the spirit of brand building best when he says:
A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.
Mashable’s Erica Swallow has a great in depth report on this lecture and has uploaded both the presentation and sound recording which I have embedded here again. They are well worth perusing.