With the new economy strongly based on internet presence and foreseeably expanding beyond the realm of our imagination in future years, I often get the question what I think is more important, personal branding or business branding, as if there would be a clear-cut option for every business or entrepreneur. Yesterday’s IPO for the social business website LinkedIn at the highest bidding almost doubling the initial introduction price per share, on the surface seems to say that investors’ belief that Internet services that connect people with common interests will be able to make more money as the Web’s audience steadily expands.
In my opinion however, main street investors still have not learned how to avoid market manipulations by Wall Street’s underwriters. Giving LinkedIn a Market Cap value of almost $9 billion on opening day, gives me the chills. And I am all for internet based valuation, but LinkedIn without any clear monetization strategy serves at best a niche market on the Internet. The website ranks 182 globally, with reportedly 102 million profiles posted. Compare this to potential other social sites such as Twitter, which ranks 27 with about 200 million subscribers, Zynga with 290 million gamers and ranking 102 globally and than of course the 800 lbs Gorilla Facebook, which has long surpassed Google as the number 1 website in the world with close to 600 million subscribers. What will the market do when these giants go public? In any case LinkedIn is at best a personal branding site with limited monetary options.
Oprah vs Steve Jobs
Yet none of this answers the question whether personal branding or business branding is preferred. Take Oprah for example. Her show last fall had 75,000 followers on Twitter, O Magazine had 106,000 and Oprah Radio had 25,000. The grand lady of talk TV herself had in excess of 4 million followers, which leads to the question what her holding company Harpo is worth without her. I guess with a personal value estimated at $2.75 billion, who cares! It’s probably the same story for another master of self promotion known as The Donald.
In the case of Steve Jobs and Apple there is clearly a personal brand, yet it is the Apple product design that makes the company so valuable.
The first question should always be for anyone starting or running a business in this day and age; what is the ultimate objective: Selling or building a historic landmark?
If your objective is to ultimately sell or go public, than find Superstars to work with you and build the business brand; if your objective is to build a landmark, you may want to push personal branding along with a keen eye for potential successors over the longer term.
Another approach here is to ask yourself the question: Do I have a product or service that is scalable. If so, you may definitely be looking at a business profile.
A self-employment-company is one in which the success of the business depends on how long and hard you work. Many professionals fall into this category: lawyers, doctors, physical therapists, and sports trainers, to name a few. Take for example Harrell and Harrell or Morgan and Morgan, large law offices here in North Florida. The founders have already secured successors by taking some of their children into the business. It is interesting to see now that Morgan and Morgan apparently changed course slightly and acquired the services of former Florida Governor Charlie Crist in their partnership, someone who definitely campaigns on a personal branding platform.
Understand me well, I’m not knocking personal branding or a self-employment businesses. They can have some definite advantages over working as an employee and they are definitely my favorite alternative to growing old on 401K’s or Social Security. I think for example that a self-employment Internet Business is the best remedy against Dementia, Boredom, Isolation and Poverty.
Mastering the Internet combined with a personal branded platform will give you:
• a higher than average income
• a sense of accomplishment
• significant control over what you do
That’s a lot, yet there is one important thing you likely won’t have: an asset that can be sold for a great deal of money. Although granted, that type of business was more a thing of the Old Economy.
A “real” business to me is one that doesn’t forever depend on the owner. After the start-up it can grow and produce more cash and become more valuable, as the start up entrepreneur(s) gradually works less.
You work hard in the beginning and then you hardly work at all. Preferably Good People are running the operations. As an owner you stop by every once in a while to check on things and if you don’t want to stop in, you can have your profits wired to your personal account. Another big advantage of real businesses is that they develop equity. Equity means real value – something you can sell or take dividends from.
How to figure out what company you have.
If you want to earn a good living doing something you like, a self-employment company may be right for you. But if you want unlimited income and the chance to make money without working long hours, you have to have a “real” business.
How do you tell if you have a real business or a self-employment company? Answer the following questions:
1. Does your income depend on how many hours you work?
2. If your customers discovered that you were no longer actively working, would they continue patronizing your business?
3. If you decided to stop working next month, would your employees be able to run your business without you?
4. Could you sell your business for a lot of money – enough to retire on?
If you answered “yes” to all of the above, congratulate yourself. You are the owner of a valuable business and we can only teach you how to integrate the worldwide web to make your business even more attractive.
If you answered “no” to any of them, you need to make yourself less important.
Understand that every business has two aspects: producing a product/service and selling it. As an owner of a real business, you don’t want to be the product/service provider. You want to be the marketer.
Being the marketer means you will work in the background. That means less glory, less personal branding, but ultimately more money and free time.
It may be flattering to hear that your customers want you on the job. But as long as they feel that way, you are the victim of their schedule. If you want to be able to control your own time – to come to work when you wish, leave when the whim to do so hits you, and take long, worry-free vacations – you must become replaceable.
There is only one way to do that: Find a superstar who has the potential to replace you as the most valuable person in the business. And don’t stop when you find one superstar. Two is better. Three is heaven.
The goal is to transform the organization from one that is based on you, to one that is driven by marketing. This is a difficult challenge – especially for people who like being “in demand. “But it is essential if you want to sell your business, as a business, sometime in the future.
I hope this answers at least some of the mystery around personal branding versus business branding.