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MenuHow much should early-stage startups with limited resources invest in their brand, and what are the most critical components?
Most early-stage startup founders are either hackers, business people or subject-matter experts, and most teams are laser-focused on building something awesome. When is the right time to focus on brand-building and what's the best way for a startup to use its limited dollars on branding?
Answers
The most powerful element of your brand in the early-stage of your startup is your reputation. Every interaction you have can positively build (or negatively impact) your brand.
This can't be bought, but can be easily lost. Common ways I've seen start-ups lose their reputation early:
1) Not listening: Startup CEO asks a customer to participate in customer development and spends the entire time trying to convince the customer they are wrong, don't understand the problem the way the CEO does, or spends time trying to sell the potential customer instead of learning and listening to the customer's needs. The same goes with investors and advisers.
Over-promise / under-deliver: This can be fatal and if not, at least set you back several steps and takes many shapes (product functionality and experience, milestones, projections, etc)
Unresponsive or uncaring: Coming across as lacking concern, empathy and/or humility is perhaps the most "viral" way to ruin or lose brand value. It seem as though every week there is a story getting shared via Twitter of a CEO, founder or key team member who is bringing down their brand in this category.
Failing to make customers love you: While all of the above things can negatively impact your brand, if you don't turn people who experience your product or service into true fans (not a like button), you won't build a lasting brand.
Keep your brand focused on your reputation in the early days. Stay laser-focused on this kind of brand-building. It is the surest way to build real brand equity.
Happy to talk through any and all of these points in more detail with you on a call.
The best time to begin incorporating identity strategy into the mix is when the vision for the product is clear. If you can clearly articulate what you are building, the key features, the environment you are attempting to create, and who your target customers are, you're ready.
Here's the good news—quality brand and identity advice and visual design does not have to be very expensive. I've worked with large agencies and freelance experts in the past, and the only difference I have experienced is the cost.
Wishing you much success!
In my personal experience from B2B start-ups.
The best time to start building a brand is from day 1, I know this sounds cliche but let me elaborate:
Three key components through which you can build a brand without spending too much money:
a. SUPER Duper Customer Service and Support. That is the best and the cheapest thing you can do to build a brand for your early stage start-up from Day 0-1. Pick up calls within 2 rings, respond to emails within 5 minutes, resolve issues within 30 minutes.
b. Next stage is: Killer Messaging
When you start selling in the open marketplace through Cold Calls and Email Campaigns:
Focus on messaging on your website. Have a very clear value prop right on the home page with a 60-70 second professionally done video and use services like TechValidate to get Customer reviews on.
c. Stage 3: Spread your wings. Become a thought leader.
Lead your industry segment by producing insights and truly thought provoking content. Participate in smaller focused conferences/seminars where your target audience visits,
At Vidyard, I focused on brand at Day 1/ground Zero. Depending on your market, it's likely true that (in large part) people don't buy what you do, they buy why you do it.
You're organization's brand is the only way to reveal culture to potential customers and recruits. A solid brand (logo, colours, style, method of communication) will help you close deals (both customers and employees).
That said, depending on your role (assuming you're the "business guy") your brand should be built by you (you are the brand).
Time to think about it = always
Money to spend on it = Logo (99 Designs - this should also dictate your colour scheme) Everything else (sales collateral, website design, decks, etc.) should be built by you.
I think when we're speaking about "limited resources" we actually mean 3 things: time, people and money.
So I will try to cover all of them:
1. Time
The best time to start building your brand is the moment you've got your idea for your business. You must build brand awareness while you're building your product and you should communicate the progress with your audience.
That way when you actually launch you will already have a community that you can work with.
Spend as much time as you can and start doing it as early as possible. Simply because your products/services are not going to sell by itselves.
2. People
Most of the startups I know hire too many engineers and not enough marketers. It's very rare that you will succeed with only 1 person dealing with SEO, content development, community building, PR, etc. Have at least 2-3 people in your marketing team or consider oursourcing some of the work.
I have an inbound marketing agency myself and can offer you a fair price for an exceptional service and results.
3. Money
Your marketing budget should be around 10-15% of your funding/revenue. I suggest you invest more into inbound marketing activities to see a bigger return of investment.
It is hard to tell where to put your money exactly because I don't know specifics about your business. If you need a marketing advice, don't hesitate to call me and I will try to help you in the best way I can.
I'm giving you a VIP key, so you can call me for free
https://clarity.fm/martinzhelyazkov/inbound
Related Questions
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Is it standard practice for a product and company name to be the same? Should our product and company name remain the same?
The main advantage of having the company and the product/service sharing the same name is that it is much more cost effective to build the brand in the early stages. You also need to consider what relationship any future products are going to have with your first (if any) - do they complement, compete, same markets/customers, etc. Generally, you will be better off by keeping the names the same. Think about how you pitch your company vs the product - is it a different story? Which name do you want people to remember? Think about where the names would live - business cards, urls, websites, app (icon), signage, etc. There are countless successful examples of different brand naming structures that work - there is no "best" way. Keep it simple. We wrote a book on naming and identity design a few years back. Happy to send you the first chapter pdf to see if it can help. Dann Ilicic WOW BrandingDI
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What is the most creative way to introduce myself (and therefore my service) to 100 key decision-makers without selling or pitching anything?
You've answered your own question. Reach out to your prospects with the question, such as "How would you...". Ask what people want then give it to them if you can with integrity and thoughtfulness.DI
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How much equity should I ask as a CMO in a startup?
Greater risk = greater equity. How likely is this to fail or just break even? If you aren't receiving salary yet are among 4-6 non-founders with equivalent sweat investment, all of whom are lower on the totem pole than the two founders, figure out: 1) Taking into account all likely outcomes, what is the most likely outcome in terms of exit? (ex: $10MM.) Keep in mind that 90%+ of all tech startups fail (Allmand Law study), and of those that succeed 88% of M&A deals are under $100MM. Startups that exit at $1B+ are so rare they are called "unicorns"... so don't count on that, no matter how exciting it feels right now. 2) Figure out what 1% equity would give you in terms of payout for the most likely exit. For example, a $10MM exit would give you $100k for every 1% you own. 3) Decide what the chance is that the startup will fail / go bankrupt / get stuck at a $1MM business with no exit in sight. (According to Allman Law's study, 10% stay in business - and far fewer than that actually exit). 4) Multiply the % chance of success by the likely outcome if successful. Now each 1% of equity is worth $10k. You could get lucky and have it be worth millions, or it could be worth nothing. (With the hypothetical numbers I'm giving here, including the odds, you are working for $10k per 1% equity received if the most likely exit is $10MM and the % chance of failure is 90%.) 5) Come up with a vesting path. Commit to one year, get X equity at the end. If you were salaried, the path would be more like 4 years, but since it's free you deserve instant equity as long as you follow through for a reasonable period of time. 6) Assuming you get agreement in writing from the founders, what amount of $ would you take in exchange for 12 months of free work? Now multiply that by 2 to factor in the fact that the payout would be far down the road, and that there is risk. 7) What percentage share of equity would you need in order to equal that payout on exit? 8) Multiply that number by 2-3x to account for likely dilution over time. 9) If the founders aren't willing to give you that much equity in writing, then it's time to move on! If they are, then decide whether you're willing to take the risk in exchange for potentially big rewards (and of course, potentially empty pockets). It's a fascinating topic with a lot of speculation involved, so if you want to discuss in depth, set up a call with me on Clarity. Hope that helps!RD
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What is the average series A funding round at pre revenue valuation for a enterprise start up w/cutting edge tech on verge of our first client.
With all respect to Dan, I'm not seeing anything like that. You said "pre-revenue." If it's pre-revenue and enterprise, you don't have anything proven yet. You would have to have an insanely interesting story with a group of founders and execs on board with ridiculous competitive advantage built in. I have seen a few of those companies. It's more like $3m-$5m pre. Now, post-revenue is different. I've seen enterprise plays with $500k-$1m revenue/yr, still very early (because in the enterprise space that's not a lot of customers yet), getting $8m-$15m post in an A-round. I do agree there's no "average." Finally, you will hit the Series A Crunch issue, which is that for every company like yours with "cutting edge tech" as-yet-unproven, there's 10 which also have cutting edge tech except they have customers, revenue, etc.. So in this case, it's not a matter of valuation, but a matter of getting funded at all!JC
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What is a normal churn rate for b2b saas company with an average monthly revenue of $850 per customer? Is 10% of the total monthly sales high or low?
10% of the total monthly sales churning on an absolute basis is near fatal. That means that within 5 months, you have 50% absolute churn per year, which reveals fundamental flaws with the service itself. Anything above small single digit churn is telling you and your team that customers are not seeing enough value in your product. I'd start by doing as many exit interviews as you can with those that have churned out, including, offers to reengage at a lower price-point while you fix the issues that matter to them. Happy to talk through this in more detail in a call.TW
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