Monetization Law Number #18

Relationship capital is often more valuable than intellectual, human, financial or physical capital

Relationships helps remove obstacles to revenue

Relationship capital is the new strategic superpower.

This chapter explains that a new form of capital has emerged for the technology-enabled business generation. That capital is relationship power!

The Rule provides a quick monetization heuristic i.e. a rule of thumb in operation, a kind of —do this— and you’ll be 80% of the way there.

Rationale explains why the rule works with deeper insights and its use in practice.

Rabbit hole provides more in-depth resources and recommendations for anyone wanting to spend more hours researching each topic.

⓵ Rule 📖

⓶ Rationale 🧠

⓷ Rabbit Hole 🐇

⓵ Rule: Monetization Law #18 📖

Relationship capital is often more valuable than intellectual, human, financial or physical capital and maybe the cheapest form of capital currently available!

⓶ Rationale: Monetization Law #18 🧠

Customer Royalty

The customer is the new royalty. Serve them in their goals and be on hand to help them when they fail and they will reward you with increased monetization.

Crowd-Sourced Capital

The emergence of a new form of capital has enabled the widespread proliferation of new industries and business models.

Influencers, promotors, e-educators, e-coaches, e-tailers, and many other tech-enabled service enterprises have grown on the back of crowd-sourcing relationship capital from happy customers willing to spread their joy.

⓷ Rabbit Hole: Monetization Law #18 🐇

Relationship Capital

The internet spurred the rise of a new form of capital; relationship capital. Representing a considerable shift in the traditional understanding of business building and, for many, indicates the future direction of company power.

Its purest form centres on an ability to reach and influence a customer.

Hence, influencer - became a job in its own right for many a solopreneur in the last decade or so.

At a company level, this shift in capital building enables vast value creation possibilities and hence monetization.

Types of capital recap 

The main types of capital are; 

\Relationship Capital - customers, suppliers
\Intellectual Capital - patents, content, IP
\Human Capital - professional services, most organisational employees
\Physical Capital - retailers, manufacturers 
\Financial Capital - banks, insurance

The 3r’s: Role - Reputation - Ratings

The armchair real estate is built on three pillars.
Role, Reputation and Ratings.

The Role is your purpose. The reason you exist. The cause that resonates. Your declared commitment.

Reputation is the way your customers have experienced your service. Your behaviour and

Ratings represent their voiced social proof, the publication of your reputation.

Armchair real estate

The power of relationship capital lies in its ability to be distributed infinitely.

Unlike human, physical, or financial, relationship capital shares the same properties as intellectual - it scales towards infinity without limit.

Do you need more physical books - print run, marginal costs, etc. - need more digital editions, just duplicate pdfs.

Similarly, the relationship model scales globally. We term this effect armchair real estate; your company can build value by building real estate in your users' homes/offices.  

🐇 Additional Research 🐇

No additional reading material, but perhaps take a minute to think about how you secured your last role, met your co-founder or found your latest business idea to demonstrate the uncaptured value of relationships.