A Startup Founder’s Perspective on Building A Brand

 

Guest Post - Jason Bunnell, founder of FLX Music

I was sitting in a Starbucks about 15 years ago about to meet a young woman at Sabre (the then parent company of Travelocity and IGoUGo) who was a designer in the Marketing department. We were meeting to talk about a side project I was about to launch. After being laid off with a significant portion of the Sabre staff before a hedge fund re-IPOed the company, this would turn into a full time startup that I recently resumed in the Finger Lakes as the FLX Music Group. 

Natasha Sanchez was in a totally different department working in a completely separate location of our office building. We only met by chance, but I asked to meet her at Starbucks because building a brand was completely foreign to me. At this stage of my career, I had been entirely focused on Finance. The creative aspects of Marketing were as unknown to me as the native language of Myanmar. This was one of the most eye-opening marketing related conversations I had had since taking marketing classes in college.

After describing the project turned startup concept, she asked me to “describe how this brand should make you feel.” What was she talking about? “Well, how do you want your customers and users to feel about the product?” I did not see how any of this really mattered.

If you have ever watched HBO’s Silicon Valley, this was exactly what Thomas Middleditch’s character Richard Hendricks was thinking when he met with the designer to help design his box. In that episode, Richard meets with a designer who starts by asking if the box was an animal, what animal would it be. What!?!? Richard leaves the designer saying, “Just make me a box! I don’t care.” Richard later recalls the conversation with his other developer co-founders and they all dismiss the design project as a waste of time, but then they all suggest what animal they think best represents the project and none agree. The importance of design was starting to register with Richard. Later when meeting with the designer to see his prototype, it is just a plain black box. “This is just a black box! I thought you were going to design something. Take some pride in your work for God’s sake!” 

I left that meeting with Natasha with a list of questions: What can I learn from my favorite brands that can be applied to this startup? How does FLX Music make me feel? How do I want customers and users to relate to this brand? It was one of the more overwhelming exercises in the early stages of my startup experience. 

The first attempt at this startup failed. After moving to the Finger Lakes to help my Dad run several of his businesses, I decided to revise the concept, this time with a slightly different premise and with the name FLX Music. I liked the brands SubPop and Digg and felt they achieved, from a branding perspective, what I wanted to accomplish: a short name, a modern feel, and they were both smaller, scrappier brands. I wanted the brand to give users a sense of adventure and feel excited about what they could do in the Finger Lakes region. I wanted customers and users to feel this regional brand was more accessible and ethical than some of the larger national equivalents like Spotify and TripAdvisor. 

The first version was actually FLX Radio. Dresden Engle, the founder of one of Rochester’s leading PR firms, pointed out that “radio” probably didn’t convey what it used to. Later, when asking two interns about the work they had done and comparing our product to radio, they both sheepishly admitted they had never actually listened to the radio. This was a huge surprise to me, maybe showing my age. Later, when recounting this to a friend, he pointed out that streaming had been out for 20+ years and students in their early twenties had grown up with music streaming. Honestly, Dresden’s recommendation did not click until then. So I updated the name to FLX Music. 

I then worked with 99designs. They ran a competition where several designers contributed designs until I had one that I thought was perfect. The logo, which you can see above, has a music note with wifi waves coming off to the right. “FLX,” the common abbreviation for the Finger Lakes, is big and bold and “music” has a tech-like modern feel, similar to Digg. I am really proud of it and have gotten great feedback. 

Branding for a new startup can be challenging, particularly for someone who would not label himself as a creative type, but clearly this can be one of the most important early decisions for a startup as it shapes your customers' and users' view of the business. It is important to get right and getting input from creatives is critical to a brands success and ability to connect with their target audience. 

What it takes to be a successful entrepreneur

As you may know, in addition to my brand management and marketing consulting practice, I have also been a coach to dozens of startups over the past five years. In working with business founders, I have determined that these are the most important contributors to success:

• A great idea that adds value to a specific set of customers
• A passion for transforming that idea into a successful business
• Ample "customer discovery" to validate the viability of your idea
• A belief that you can accomplish anything
• A high tolerance for calculated risk - that does not mean that you are motivated by risk or seek it out, only that you are willing to work with risk in smart ways
• The ability to repeatedly overcome adversity - resilience and perseverance (the ability to repeatedly "pivot")
• Learning from failure
• Adaptability
• A strong work ethic
• Decisiveness and a penchant for action
• Ability to thrive in an unstructured environment - there are no directions, there are no hard and fast rules
• Some level of smarts - you do not need to be a genius
• Emotional intelligence
• Salesmanship - the ability to tell a compelling story about your new product or service
• A willingness to network with others - you will fail if you try to go it alone
• No fear of asking for help
• Along with this, an ability to seek out and gather the needed resources to succeed
• Knowing when to switch from an emphasis on product/service development to an emphasis on business development, sales and marketing - this does not mean halting work on product/service development
• Establishing a continuous loop of customer feedback and product/service enhancements
• It is an added benefit if you have some financial management skills, the most important of which is cash flow management
• It is also an added benefit, but not necessary for success (you can hire this expertise), to be a savvy marketer, understanding the target customer so well that you can think through the best messages and marketing strategies for them
• Most successful entrepreneurs also have an ability to delay gratification - many are willing to work tirelessly with little or no pay for a period of time with the vision of one day cashing out for millions of dollars (or at least managing a very successful business well into the future)

The most important of all of these skills is a "can do" entrepreneurial mindset. As an investor in startups, I always focus on the entrepreneur and his or her mindset/skills over the idea. I would rather back an outstanding entrepreneur with a mediocre idea than a person with questionable entrepreneurial tendencies and an outstanding idea.

Having said all of this, these are some of the common problems that entrepreneurs encounter:

• Not offering the right “value proposition,” that is, something people really want
• Not doing enough “customer discovery,” that is, understanding customer needs and desires
• Founder is too focused on product development vs. business development, especially when it is time to switch primary focus from the former to the latter
• Lots of uncertainty and risk and need to change course or “pivot”
• Access to funding/$
• Hiring the right employees and not being afraid of firing those who don’t work out
• “Scaling”/growing the business - investment in inventories (and marketing efforts) before sales occur is a particularly common problem in cash flow management
• Knowing when you need to hire a professional CEO who can take the company to the next level – knowing when the leadership role has exceeded your talents and abilities.

The good news is that entrepreneurship adds value to the world in these ways. It is often enough motivation for an entrepreneur to "push through" when the times get rough.

• Introduces new products and services
• Creates jobs and economic growth
• Empowers entrepreneurs to pursue their passions
• Creates wealth for the entrepreneur and his or her investors and employees
• Can address social issues
• Can advance technology, which can be used in other ways

If you have thought about becoming an entrepreneur, I hope this blog post has helped you think though what it takes to be a successful entrepreneur.
 

Startup Insights

Many of you may know that in addition to my brand strategy consulting I am a new venture coach. I have been coaching pre-seed to series A startups for over three years now, during which I have coached two dozen companies with a very high success rate. Many of these companies have reached the commercialization stage in which they have achieved rapidly growing profitable sales. Here are some of my thoughts from working with startups. 

Entrepreneurship adds value to the world in these ways:

• Introduces new products and services

• Creates jobs and economic growth

• Empowers entrepreneurs to pursue their passions

• Creates wealth for the entrepreneur and his or her investors and employees

• Can address social issues

• Can advance technology, which can be used in other ways

These are the most common problems entrepreneurs encounter:

•  Not offering the right “unique value proposition,” that is, something that people really want that is different in meaningful ways from what is already available

•  Not doing enough “customer discovery,” that is, understanding customer needs and desires

•  Founder is too focused on product development vs. business development, especially when it is time to switch from one to the other

•  Lots of uncertainty and risk and need to change course or “pivot”

•  Access to funding/$

•  Hiring the right employees and not being afraid of firing those who don’t work out

•  “Scaling”/growing the business, especially anticipating increased cash flow and customer service demands

•  Knowing when to hire a professional CEO who can take the company to the next level – knowing when the leadership role has exceeded the founder's talents and abilities and being willing to give up personal control

Branding & Pitch Decks

 

I have found that my experience in crafting brand strategy and positioning has helped me immensely in coaching startups in their pitch deck creation. Startups use pitch decks to raise funds and other support for their nascent businesses. Just like brands, pitch decks need to tell a story. By definition, stories have plots and characters. The characters are the target customers and the plot is how the nascent business will uniquely solve a significant problem that those customers have. The story needs to outline the company’s unique value proposition and the business model that will enable it to deliver on that unique value proposition. The value needs to be defined in terms of customer benefits rather than product functions or features.

 

The business must demonstrate that it has done due diligence in understanding who its target customers are demographically and psychographically and what their functional and emotional needs are. It needs to show how it will deliver a unique and superior solution in meeting its customer’s needs. This requires a thorough understanding of the competition. Further, the business will want to illustrate what its product is and how it will be used, including how the customer will experience using it. Ultimately, the business will want to share its long-term vision, which is very similar to the vision that would be a part of a mission | vision | values statement. 

 

Sure, there are some other elements in a pitch deck that are not typically a part of brand strategy or messaging, including an overview of the market, the startup team and its advisors, the potential risks, the finances and why they are pitching to a particular investor. But, whether one is creating a new product concept statement, a brand positioning statement, a brand ‘elevator speech,’ a startup pitch deck or even a grant application, the following components are essential:

·      Detailed customer description,

·      Customer insight including an understanding of their unmet needs or pain points,

·      Unique value proposition,

·      Which includes an articulation of the unique benefits that will be delivered to the customer,

·      And an understanding of the competition,

·      And finally, proof points and “reasons to believe” that you can deliver on your unique value proposition; put another way an indication of how the organization’s business model supports delivery of its unique value proposition.

And, if there is additional space for description, the messaging would benefit from being told in the form of a story with a happy ending.

My experience in new product development, brand positioning and strategy, not-for-profit grant writing and now new venture coaching has allowed me to identify the similarities between these activities. It all boils down to understanding an unmet customer need and developing a solution that uniquely meets that need. Further, it requires proof points that one is capable of uniquely delivering against that need. Finally, this message can be delivered in a more compelling way through storytelling. It’s that simple and it is also that complicated. 

A Common Sense Approach to Marketing for Startups

If you are a startup, you are likely more focused on raising money, prioritizing your next steps, prototyping and perfecting your product, figuring out business partners and sourcing, addressing operational issues and getting your idea in front of potential customers than on developing and executing marketing plans. And if you are trying to generate sales, you are likely to be more focused on selling approaches than on marketing. But even if you are thinking about marketing you may be considering what tactics to use including advertising, publicity and social media marketing. But until you have a deep understanding of your most likely customers and their motivations, choosing marketing tactics is premature. 

If I were a startup, here is what I would consider first:

• Who is going to buy our product or service?
• Who is our best customer likely to be?
• What unmet needs are we fulfilling for them?
• What other products or services might they consider to meet the same needs?
• How is our product or service different from competitive offerings?
• Is our product or service different enough to give us a sales advantage over competitive products?
• What is our unique value proposition?
• In twelve words or less, what is our key message to potential customers?
• Where do those customers shop?
• What media do those customers consume?
• Where do they get their ideas of what to buy?

Once you have answered these questions, you will be able to create a more strategic, effective and efficient approach to gaining and keeping customers. That then becomes your marketing plan.

I wish you much success in building a successful marketing approach for your startup and its products and services. 

26 of the Most Common Startup Challenges

 

Following yesterday's blog post, today I list the 26 most common startup challenges. 

1. Having the right idea – building something someone wants
2. Understanding your business’ unique value proposition
• Confirming customer need / marketplace gap
3. Listening to and acting on customer feedback
4. Thinking too small
5. Taking the first leap – knowing where to start
6. Assuming you need a lot of money right away
7. Money / fundraising
8. Cash flow management
9. Chasing investors over customers
10. Trying to do it alone
11. Finding / hiring the right people
12. The founders
13. Not researching competitors
14. Competitors’ actions / competitive responses
15. Planning & focus
16. Scaling up
17. Unrealistic expectations
18. Remaining within one's comfort zone
19. Self-doubt and fear of failure
20. Inability or unwillingness to pivot when necessary
21. Failing to ask for help
22. Lack of mentorship
23. Time management
24. Customer acquisition / sales
25. Marketing mistakes
26. Customer retention

Brand Problems: Small vs. Large Companies

© 2015 by Brad VanAuken, Excerpted from Brand Aid, second edition, available here.

Branding Lessons for Entrepreneurs

It is never too early in the process to understand who your brand’s customers are, what motivates them and how to reach them. Doing this at the end of the product development process is usually too late. You will have developed a more unique and compelling solution if it was based on these insights earlier on in the process.

Your solution needs to deliver greater value (that is more functional, emotional, experiential or self-expressive benefits for less money or effort) than competitive offerings for it to break through and gain share. Make sure you understand what your brand’s unique value proposition is.

Customer insight will help you create a brand message that resonates with your customers, one that is unique and purchase motivating. Effectively articulating relevant differentiation is key to building a strong brand.  In addition to advertising copy, this message can be translated to a pithy brand “tagline” and a brand “elevator speech” (typically 40 to 70 words) that you and your company’s employees can use when talking about your brand.

Marketing your brand and its products should not be underfunded. If you offer superior products backed by outstanding service at very good prices delivering an outstanding value but no one has ever heard of your company, brand or products, how many sales will you get? Zero.  No awareness = no sales. Awareness building is perhaps the most important component of building a strong brand.

You have the most potential to save money on marketing when deciding on which media/vehicles to use to get your messages out – email, direct mail, targeted publicity, targeted advertising, specific trade shows, etc. Spending money on highly targeted media (versus less targeted or mass media) will save you quite a bit of money in reaching your target audiences. It is usually not wise to jump on a good media deal if it is not laser focused at your intended customers. Develop and follow a highly effective and efficient media plan.

After you have accomplished all of this, distribution becomes the most important key to success.  The brand that is more available to its target customer has two advantages: (1) it is easier to find and purchase and (2) it has greater marketplace exposure leading to greater brand awareness.

Finally, a word on consistency. Changing the brand’s logo, tagline and messaging on a frequent basis will ensure that nothing about your brand sticks in your intended customers’ heads. Consistency and repetition build strong brands.  Once you have developed a unique and compelling value proposition for your brand, repeat it again and again and again. In general, people need to hear something 7 to 10 times before it registers with them.