Owned Network

Exchange credibility with other brands and influencers by launching co-branded products that can be monetized.

Why it matters: Both the brands exchange credibility and the collaborations help expose each brand to new audiences.

• The right influencers already have a presence in your target audience’s lives. The role of an influencer is similar to that of billboards – they grab attention in the middle of a traffic intersection, and convey a message that usually sticks.
• Second, when someone else talks about you or your product, it comes across as more legit.

Partner with influencers

In 1994, James Jebbia started Supreme, a small skateboard shop aimed at the New York skating scene. Over the next 25 years, Supreme expanded into high-quality clothes and accessories and became a staple in the streetwear community. In November 2020, VF Corporation acquired Supreme in an all-cash deal for $2+ billion.

Few examples come to mind:Supreme has frequently collaborated with many iconic brands over the years, such as Nike, Louis Vuitton, and Comme des Garcons.

• YouTuber Marques Brownlee launched a sneaker with footwear brand Atoms.
• Indian NFT company Guardian Links dropped its Chakra The Invincible collaboration with Stan Lee, the creator of famous comics like Spiderman, Iron Man, Hulk, and The Avengers.

Rent influencers

Nike pays sportsmen and women to wear Nike at famous events. Similarly, everytime celebrities and trendsetters — A$AP Rocky, Tyler the Creator, and Kanye West — are seen wearing Supreme, the demand for more Supreme products spikes.

Here’s another example from  Teixeira, T. S., & Piechota, G. (2019). Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption. Currency.

Charles-Albert Gorra started Rebag as a destination to resell high-end used bags – bags that held a resale value of $13,000. He began this venture coming from a background of investment banking. This meant he had no knowledge or contacts in the fashion industry to help him gain his first customers. Instead, he invested in creating a small team that approached influencers, personal shoppers, wardrobe consultants, and salespeople working in high-end stores, asking them to talk to their customers about selling their unwanted bags on Rebag. These influencers were incentivized by offering them a commission on every bag that entered Rebag’s inventory. This eventually kickstarted a business and raised over $68.3 million dollars as of May 2020.

Find contributors, volunteers, experts, and nerds in your Niche and ask them to contribute to your product.

Why it matters: Beyond the obvious advantage of collecting content, you end up collecting people into your Community. Then there are some use cases where information can only be crowd-sourced.

Whom to recruit: Contributors are likely to be people with expertise, time, and Labor but lack a platform.

• Contributors tend to be nerds who are looking to an open platform they believe in. For example: Open Street Maps, Wikipedia, WordPress, etc.
• They can also be professionals looking to signal their Judgment. For example: Collecting points in Stackoverflow, Reddit, Hacker News, etc. Often such platforms have a well-moderated Community that incentivizes participation through reward points and badges. For example, Reddit Moderators Do Over $3.4 Million in Free Labor Every Year
• Then there are doctoral students, researchers, professors, and policy analysts who contribute analysis to mainstream newspapers.
• Sometimes experts look to collaborate because of the production and presentation skills that you bring to the table.
• Another way is to look for underutilized assets of NGOs and think tanks, for example, databases and Evidence built up by researchers that have not reached the masses.
• Finally, there is, of course, monetary compensation.

This is a quote by Hunter Walk.

The best case scenario for any work product is that every audience you onboard ends up staying back for the Community, where audiences directly help other audiences.

Why it matters: The resulting network efforts will make your business hard to displace.

• Over the last 20 years, many blogging platforms have come and gone but WordPress has endured. This is because of the Community of developers, agencies, designers, and dependent companies that it has nurtured. In 2011, WordPress powered 13.1% of the Internet. By 2019, that number had grown to 32.7% of the Internet.
• Medium is more valuable than WordPress because Medium has a community of audience.
• YouTube is more valuable than Vimeo.
• LinkedIn is more valuable than Indeed.
• Royal Enfield in India is more valuable than Yamaha Bikes.
• Attending Stanford in-person is more valuable than their online courses on Coursera.
• GitHub is more valuable than GitLab.

How: To build a Community, you need good software and more importantly great moderation. Moderators should:

• Have a voice that is smart, insidery, critical but generous.
• Be kind and assume good faith.
• Encourage the right behavior that is right for the platform. For example, encourage comments and constructive feedback that is more thoughtful and substantive, etc.
• Discourage shallow dismissals, ideological battles, swipes that discourage curiosity.

The strongest commerce brands nurture a strong resale market and Hypebeasts purchase their products and board them in hope their resale value will rise.

Unlike most brands, Supreme isn’t in the business of profit maximization, i.e., selling as much product as possible. Instead they:

• Promote exclusivity: Their collection drops have many products but in minimal quantities. Additionally, once sold, Supreme never repeats the same product. This scarcity intensifies the desire because customers know that it won’t be available again if they do not buy the product right now. Generally, demand far outstrips supply. Hence, Hypebeasts compete to buy the products, and the merchandise is sold within minutes, if not seconds. Similarly, luxury brands like Burberry, Nike, and Louis Vuitton spend millions on destroying their own unsold merchandise to preserve their reputation of exclusivity.
• Maximize for a resale market that stands the test of time: Hence, Supreme cannot jack up the prices even if demand outstrips supply. Instead, you’ll have to leave value on the table so that a mature resale market develops and resellers can earn a healthy profit. In return, you lock in customers and resellers into a community that is committed to you long-term.

Cultivate Fear Of Missing Out: What happens if you wanted something, but it got sold out? You know that Supreme won’t release more of the same product. This is where the resale market kicks in, converting Supreme’s merchandise into collectibles. Often called “Supreme Flipper” or “Supreme Collectors,” resellers earn a significant markup on the original retail price. You can find the Supreme products for resale on websites like StockX.

Unlike Zero-sum game, positive-sum games can have multiple winners. For example, everyone can build leverages like Capital, Health, Labor, Judgment, etc. that eventually lead to Competitive Differentiation. You win by being better at what you do.

In zero-sum games, for someone to win another has to lose.

Why it matters: It is important to identify zero-sum games and avoid them because the resulting drama distract us from what matters strategically.

• It makes us hallucinate opportunities where none exist.
• It takes significant time to play status-games because status needs to be known, signaled, and maintained.
• Those who play zero-sum games don’t attract opportunities from long-term players.
• In zero-sum industries, prestige is given much higher weightage than merit.

In contrast: Be on the look out for and play Positive-sum Games.

What causes it: Zero-sum games are triggered by scarcity, conformity, and status-seeking.

• Competition happens when it isn’t feasible to create net-new things and there is isn’t enough money (store of value) to go around. This happens in industries like real-estate, etc.
• In some industries, success is rewarded with status instead of money (store of value), for example, in academia, news and media, identity politics, managers in a dysfunctional organization, etc. In such situations, signaling becomes a better means for advancement than actually doing the work. In contrast, incumbents play the role of gate-keepers.
• A rookie in a cricket team doesn’t resent a pro. However, when hierarchies are built without any meaningful criteria and merit, it degenerates into a zero-sum game. For a number 2 to be number 1, the number 1 must be brought down.

To break free from zero-sum games:

• Think and act independently. Don’t conform.
• Think in Building Blocks
• Build on what you’ve got.

Even after you Buy your way in, always give more than you take from a Owned Network.

• Be present: It could be something as simple as not carrying on a conversation with yourself in your head. Instead, be there fully, listen, and care about the people you are speaking to and focus on their interests.
• Provide value to the conversation by teaching, giving a compliment, making a funny comment, or telling a story.
• Finally, be high status and don’t seek approval.

Give something of value to enter a closed Owned Network or Community of people.

The only way for us to move forward is to encourage and amplify the work of people in your Owned Network who are willing to learn, to see and to commit to making things better.