Brands have compounding value.

· Bits and Bobs 8/10/26
  • Brands have compounding value.
    • The more success the brand has had the more valuable it is, because the streak is longer and the more the owner has to lose by breaking it.
    • If the brand starts giving leverage, it makes sense for the owner to invest in it more, and to the extent it's still useful, it becomes even more useful.
      • As the brand gets better known, acquiring users and investors gets cheaper.
    • Because branches have power-law returns, reputation is partially noise-driven and then self-fulfilling.
      • A lucky start manufactures the conditions for a real edge.
    • The brand has to stand for something.
    • Successful brands are tempted to dilute it to cash in on brand value and trust.
      • The stronger the brand, the stronger the temptation to dilute it to extract value.
    • Brand is trust, distilled.
    • An eponym stretches too far over time to still mean the specific brand.
    • A metonym over time dilutes to not have any of the original promise of the brand.