Should a startup or small business wait to invest in its brand? The answer is no.
You cannot wait to start building the foundations of your brand immediately. Why? Because if you ever plan on raising money, getting acquired, or getting into big box retail, your brand can be a valuable intangible asset. And this is not going away anytime soon; in fact, it’s becoming increasingly true that our world will continue to place higher value on digital assets. In Powershift by Alvin Toffler, he clairvoyantly wrote that we are moving from "a trust in permanent, tangible things like gold or paper to a belief that even the most intangible, ephemeral electronic blips can be swapped for goods and services. Our wealth is a wealth of symbols, both our money and our goods are becoming intangible."
Our wealth is a wealth of symbols, both our money and our goods are becoming intangible.
Why do you need to invest in branding now?
A well-positioned brand can help you close a round of financing, get more deals, acquire tangible IP, get you distribution into big box retailers, and enable you to price your product or service as a premium against competitors. This all will help to secure the sustainability and future of your business, along with affording it a higher valuation. One of my mentors once told me, "Today investors invest with their eyes, not their wallets." So yes, a startup and any company, for that matter, should be thinking about how to invest in its brand from the beginning.
For startups, the work starts the day you decide to venture out on your own and build your dream. Startups can’t afford to short the brand development side of the business to focus only on the product engineering or software development. The brand will be the hinge point for all product communications and must be as strong as the product itself.
The brand will be the hinge point for all product communications and must be as strong as the product itself.
Everything you’ll need to build Brand Equity overtime:
You will need to address the following:
1) Core Purpose
2) Brand Strategy
3) Brand Essence
4) Brand Architecture
5) Brand Voice and Tone
6) Messaging Platform
7) Product Design
8) Digital Asset Management
9) Brand Identity System
Build your brand in stages that correspond with your timeline:
Below is a very quick roadmap on what sequence you should follow to develop your brand. For starters, a brand is so much more than a logo.
As an early-stage startup, you will most likely not have enough funds, resources, or a big enough team to create and maintain a robust branding system. And that’s OK. Your focus is on fundraising and product development, not on brand strategy and brand development. As a result, most founders come up with their own name and get a family member to design the logo. This is a backwards approach, not because of the family member bit, but because of the sequence. The order is all wrong because a timeless logo has to come from a purpose statement, which can only come from a clarified value proposition. Firstly, founders shouldn’t think of it as a single tangible asset, like a logo that you get designed and then move on to more important assets. If you have an app, do you build it and just sit and wait for people to download it and subscribe? Absolutely not, you realize that now you have a platform that needs to be updated on a regular basis. That’s how a startup should view its brand. Now that we've established that your brand is not just one thing, where do you start? Think of it in stages. And since Founders and startup CEOs are constantly having to think about the bottom line and the next tranche of financing, we’ve broken the stages to align with traditional fundraising stages. It’s not a perfect science, but we’ve found that it makes the investment feasible and less daunting for founders who are wearing a lot of hats, especially in the beginning.
Each stage should correspond with the funding plan and product development roadmap. So, where do you start? After you have your name, you should start by developing your core purpose statement. And according to Sequoia's gold standard pitch deck (which has helped me raise millions over the years), it should be on page one of your investor pitch deck.
Although the three stages below are not perfect as they are arguably many different perspectives on the stages of a startup, I’ve learned that the phases of a startup and all the projects that go along with it, branding, product design, prototyping, software development, sales, marketing, integration, operations, legal and finance, can be broken up into 12-18 month tranches. According to Silicon Valley Bank, it takes 18 months to get from one stage to the other. It can also take the same time to build a prototype (a real functional marketing-facing prototype – not a Mechanical Turk kind of "pretotype" or rapid prototype).
What’s First in Branding for Startups?
For each stage of your startup, I've listed what areas of your brand you need to work on. Since we've established you need to work on your brand all the time, just like you do with product development. But be careful not to stop caring for your brand because it’s easy to fall into ferocious feature-set envy and get caught up in the product design and dev. Why do founders do this and incidentally neglect the brand? It’s because "brand" is an intangible asset, and a product is tangible. As a result of this mindset, it’s a lot easier to touch, feel, and ultimately understand. Also, the majority of people naturally tend to think a brand has little tangible value, and the product has all the tangible value.
Stage 1: Pre-Seed (Pre-Money)
During this stage, you have almost no money, but you need a name, a brand, and a core purpose to build a deck and a sense of identity. Without this, you won’t get investment from family and friends. These are more important than the logo and will set you up for clarity, consistency, and a better connection with why you’re doing it all. This speaks volumes to investors and buyers. The important thing is to communicate a clever and concise core purpose that aligns with the primary passion that prompted you to start the business in the first place. It should also connect to the product in some way.
Stage 2: Seed (Post-Revenue)
Stage 3: Growth Stage (Series A-C)
