Building Better Assets

Jonathan Poland
6 min readAug 6, 2022


I spent nearly 20 years analyzing and forecasting complex assets across the capital markets. Today, my work is focused on turning those insights into models for better business development. When I use the phrase building better assets what it really means is working to improve the quality, value, and impact of a business or investing in the companies that are doing just that.

Business leaders, the guys and gals who manage a company or department with direct P+L responsibility, are the people who have a hand in building better assets. If that’s the position you’re in, this is for you. This is not a comprehensive guide to achievement in business. It is simply a look at how I think about the matter and maybe you’ll find some value in it.

The most valuable
organizations on earth…

Every year Fortune magazine publishes a list of the top companies in the world. They rank them by revenue. Most are publicly traded, owned by the public mostly via vehicles like mutual funds. The S&P 500 and Dow Jones indexes are another place to find the largest organizations in the world.

Today’s large company is a prime example of the results of building better assets. It is how they got to the top of a market, industry, or sector. Here are some core traits intelligent investors look for out of these kind of businesses.

  • Consistent Growth in Sales
  • Consistent Growth in Earnings
  • Consistent Growth in Book Value
  • Low Debt to Income Ratio (> 5)
  • High Return on Equity Average (+12%)
  • Low Operating Costs to Income (> 75%)
  • Low CapEx to Income (> 75%)
  • High Gross Profit Margins (+ 25%)

When the economy is growing faster than normal because of monetary supply growth it can make certain calculations more difficult. However, the best businesses still have the above qualities. How they created them is where the rubber meets the road.

Consistent Growth

For most people building a business is a complex, burdensome endeavor involving thousands of possible tactics. The truth is that growth comes from acquiring more customers, selling them more of what you offer, and getting them to shop with you more often. That’s it. publishes a list of 5,000 fastest growing companies if you want to do some research. If you can focus on those concepts, rethink and reorganize the business activities into these categories you can see the dramatic boost in revenue and profits. It’s simple, not easy.

Increase the number of clients — turn more new prospects into paying customers.

Increase their average spending — get each client to buy more at each transaction point.

Increase the buying frequency — get customers to buy from you more often.

Now, let’s do some math. Let’s say a company does $1,000,000 in annual sales with 200 clients paying on average $5,000 per transaction. If it can grow 20% across these categories, it then gets 240 clients paying $6,000 per transaction just 20% of which come back as a repeat customer during the year, the company generates an additional $728,000. The concept of generating alpha means to achieve these goals with the same or close to the same amount of spend that would have normally created $200,000.

I know a flooring company that does just this amount of business at 40% margins. Of course, they need a new set of customers basically every year and could go out of business if the owner doesn’t set up systems and hire people to fill in the gaps. That’s where the thousand factors come in to how it gets done. And, maybe this doesn’t happen every single year, fine. It’s the sustainable value created that matters.

Sound Financials

There is a risk of growing yourself right out of business. A home builder called Homex did this after the 2008 housing bubble. As a company builds brand value, it needs to remain financially sound. It won’t be able to operate with negative cash flow forever, despite what might be seen from unicorn startups.

Generally, a company needs competitive advantages to tick most of the traits from above. Check the following metrics against your industry or local markets to see whether or not you have a competitive advantage.

  • Sell a product or a service that is a basic necessity
  • Be the first capture a lot of market share
  • Operate in a large industry with little competition
  • Sell a unique product that doesn’t change much
  • Provide a unique service that’s difficult to replicate
  • Be the low cost producer and/or seller of basic necessities

Business is about capital. Leaders compete on the field of capital allocation. Being able to grow without expending a lot on equipment or debt or basic operating costs means you have a competitive advantage. Even if that doesn’t translate into a higher valuation over the short term. Too many businesses, even boring ones, have a structure that eats up all their excess cash inflow and when that happens, it’s hard to build a better asset.



Create new ideas, projects, campaigns, and initiatives, test multiple different activities per product or service, adjust to the feedback and KPIs, and optimize for scale and outperformance.

Once you notice that something is working, it’s easy to get complacent and just throw more money at it. That’s where the metrics above come in handy. Don’t settle for a current definition of success, benchmark it against what the leaders are doing. If your company is the leader, there may be something smaller competitors are doing to grow faster that you can emulate.


Listen, maybe this is cringe AF. The whole point of building better assets is to compete and win. It’s a competitive market and there are new competitors coming into the market literally every minute. Add that to nearly 60 million freelancers and over 20 million businesses and the question of how do you survive and grow is staring you in the face. That’s why it makes sense to have funny letters to remember.

The formula to building better assets is centered around the concept of constant improvement. For business leaders that means improving the quality of investments, value of offerings, and impact in the market. For investors, that means looking for companies that are constantly doing this.

One example.
Salesforce (CRM)

The following is a look at the Salesforce website evolved over time. The company is an internet based business and as the internet became more ubiquitous, the more improvements it made to this part of their deliverable. The company’s CRM offering also got a lot better and more valuable too.

Just in the last decade the revenue has increased north of 10x, the profit has gone from red to black, and in turn the stock price has crushed both the competition and the market index. You can find these examples throughout the public markets, but hindsight is 20/20.

Sales force website over the years


Building better assets = better business development, which means focusing on quality, value, and impact across the main aspects of your company, which really means mastering the fundamentals, allocating capital at scale, and adjusting to market changes.

To do that, you can model others up to a point and then you have to test, adjust, and optimize your own new creative innovative ideas… and those have to also be across the main aspects of your company.

Differentiation = survival. There are three basic ways to grow a business: more customers, more sales per customer, and higher spending per customer.

To compete and win there are KPI’s that your business has to be benchmarked against, even if you’re the perceived leader in a market, industry, sector.

Study the data to reverse engineer how other companies did it (eg Fortune 500) and then model and TAO to improve QVI.



Jonathan Poland

20+ years helping people build better assets. These are notes from the journey. Work with me @