Why Startups Should Care About Branding

This is a blog by Mark Verzijl, Consultant at Sciential.

Branding is often identified with big pharmas with massive marketing campaigns addressing the masses. Think about the colossal commercials that made certain brands synonymous with product categories in over-the-counter drugs. They even have a name for this phenomenon: genericization. Branding evokes the association of large corporates, but a charged brand will definitely benefit startups as well. I want to share 5 use cases where branding can be of demonstrable value for your startup.

𝐁𝐫𝐚𝐧𝐝𝐢𝐧𝐠 𝐛𝐫𝐢𝐧𝐠𝐬 𝐟𝐨𝐜𝐮𝐬
Brand positioning is about making decisions. You have to decide who you serve with what product or service. Or perhaps more importantly: what audience, product or service do you neglect. You have to make clear choices when you market a brand and clear focus is probably one of the crucial aspects within a startup.

𝐒𝐡𝐚𝐫𝐩𝐞𝐧 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐦𝐨𝐝𝐞𝐥
By extension of the previous point, branding makes you sharpen your business model. With your new positioning, what is your competitive advantage? Do you focus on points of difference or points of parity? And as a consequence, how would that touch your margins? After all, you usually need more resources when penetrating a red ocean than jumping into a blue ocean. Your position might force you to have a second look at the efficiency of your business model.

𝐀𝐜𝐜𝐞𝐬𝐬 𝐭𝐨 𝐧𝐞𝐰 𝐜𝐚𝐩𝐢𝐭𝐚𝐥
As a startup, a strong brand makes you more appealing to investors. As described, branded companies have a laser focus, a well thought-out business model and stand out from their competitors. Typically, those companies are also strongly visible – also for investors. This increases the likelihood of getting an investment in the first place and hopefully strong position at the cap table.

𝐌𝐨𝐫𝐞 𝐚𝐭𝐭𝐫𝐚𝐜𝐭𝐢𝐯𝐞 𝐭𝐨 𝐜𝐥𝐢𝐞𝐧𝐭𝐬
Surely the most obvious use case, but startups with a strong brand tend to attract more (qualitative) clients. Prospects are usually more convinced by strong brands, reflected by their customer lifetime value. Also – known, considered and preferred brands often have prospects coming to them instead of the other way around.

𝐖𝐢𝐧 𝐭𝐡𝐞 𝐛𝐚𝐭𝐭𝐥𝐞 𝐟𝐨𝐫 𝐭𝐚𝐥𝐞𝐧𝐭
After startups have gained some momentum, staffing is the logical next step. Strong brands will usually get noticed by talented professionals. Having its own values and personality, potential candidates could identify themselves with your brand. Identification could be a decisive factor in the battle for talent.


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