Not only startup investments have declined sharply, until recent times, about 2000 Indian startups had to shut shops in the last two years alone due to lack of real innovation. As a result investors are not any longer as comfortable to invest in startups as before since they are concerned about emerging overvaluation patterns in the start-up market place. The key reason perhaps is that startups are focusing on fast track sales volume rather than profit margins on the one hand and there is absolute lack of effective growth strategy especially branding in case of vast majority at the early stage.
The start-up funding by angels and VCs seems to have fallen by almost 24 percent this year. Nevertheless there is some level of optimism due to Indian government’s announcement to bolster entrepreneurship by setting up an exclusive start-up fund. Startups are in pressure to explore newer ways of seeking and acquiring capital. Equally they are expected to refocus on viable and sustainable business models since investors seem wary of failing discount sales models and also expect sufficient customer base or a robust growth strategy to build it with a profitable revenue pipeline and not just a brilliant idea or a prototype alone. I think investors will put their money henceforth only into startup brands that are visible to its customers and is equally profitable than merely being built on discount sales.
So if you see for every start-up that is still around doing business and growing visibly successful by being able to draw customers and investors there are more than a dozen which have miserably failed due to lack of innovation in strategy and of course of effective branding. This is why the faster they become visible with a compelling story to emotionally connect with their audience the better the prospects of a success for them.
How can you become visible to the market effectively? It comes with branding which includes PR and its only through branding that your customers become aware of your very existence and the purpose of your product or service. And when your branding is effective you will further become visible to the investors and other stakeholders too as a firm to consider for value.
Isn’t this a reason for startups to make branding an integral aspect of their overall business strategy? Along with it the culture of leadership thinking? This is where horizontal leadership skills will come in handy for start-up entrepreneurs. So one of the most important factors for startup success beyond any doubt is an effective branding and leadership thinking as a culture right at the beginning.
When it comes to start-up branding the problem for many entrepreneurs seems to be both about ‘why’ and ‘when’. The prevalent thinking is why invest leadership time, effort and money in to strategy or branding and hiring a strategy or branding consultancy before the product or service is ready to launch or at the very early stage of bootstrapping. Another common thinking by startup founders is that they have got to focus to fix the business first in terms of product or service without understanding that branding may take care of it adequately though not as a quick fix or that they don’t have money to afford it at that juncture.
From what I have observed consulting start-ups apart from the well established businesses or institutions is that, those who have failed to brand themselves much earlier than to even being launched with a formidable reason to do so is like missing or messing the market just standing in front of it with the targeted potential for its product or service.
Doing core of what the business intended for is the key. But telling your story is all the more important. You certainly need branding to tell your story. PR does it as an effective tool as well. Branding gives you the edge along with it. I would say branding is the science of story telling and PR the art. Many start-up entrepreneurs conveniently forget that the purpose of innovation is not simply to create a product or service. Isn’t it equally important that you simultaneously present it meaningful to your audience who consume them as well?
If the business has to become meaningful and relevant by being heard of your story that customers and investors tread faster to your journey as stakeholders then branding is the best suited way. It’s branding that can create the meaning and relevance to your business idea through a story that can resonate with your organisational and market stakeholders.
Let me explain why and when to start branding your start-up.
Firstly as a startup your first level pressure is to create a loyal base of followers and influencers to your business idea or a product or service. Building a brand and a base of followers or influencers is not an overnight affair. It does take time. So would it not be wise to simultaneously build a circle of your business influencers during the start-up time so that when the launch day comes you have a concrete following to engage with who can relay your message to your audience.
Secondly you may even be able to raise business orders in advance in anticipation without having a finished product or service and who knows you may even manage to raise funds too. Getting a powerful story or a narrative around your entrepreneurial idea right at the pre-launch phase can draw attention from potential customers and investors as the acquisition cycle is also longer than you may forecast.
Thirdly you can craft and perfect your brand messages before the launch to create entry impact. History states, Nothing was ever built in a day. So would your brand too. It needs a compelling story and valuable visual identity. It takes few weeks or even couple of months even in case of a start-up to design a brand strategy or a manual for effective branding.
Let me also explain briefly what Storytelling can do to your business.
Storytelling is an important element of branding. It gives your start-up the context and makes your messaging more relevant to your audience. It draws attention and connects your product or service to your audience emotionally. For example, see these two messages.
“Rajini’s Kabaali clocked in 200crs in the first day box office”.
“Super star proves that there is no match to him as Kabaali opens with an earth shattering 200crs in the first day box office despite mixed reviews”.
I am sure your attention naturally goes to the second one ‘as a consumer’ since it evokes your brand’s superlative emotional trigger to get it connected with you better. That’s the power of storytelling.
By giving your start-up an emotional context, storytelling can broaden the horizon for your product or service by creating meaningful relevance and thereby an edge. And then there is the campaign element to sustain your relevance and enhance value. That’s the power of branding.
It puts you ahead of others in visibility, reach and relevance. Here starts the potential for leadership that needs to be nurtured.
Only those startups that can engage their stakeholders with an emotional connect and evoke trust through effective branding can even survive leave alone the journey towards being recognised as leaders in the category as they grow. So it is extremely crucial to start branding a startup at the very early stage through the growth.
The author is Jhon Arokiasamy, Founder and leadership strategist at Persona