From bootstrapped to big bucks: Alina Kilian on the importance of startup authenticity

‘Be yourself’ — a phrase so overused, it has become meaningless. When examining the success factors of startups, this simple saying, however, certainly seems to pack a punch. With ‘authenticity’ becoming somewhat of a buzzword in recent years, many consider it to be fundamental to shedding the ‘startup’ label and scaling. Indeed, considering the rise of artificial intelligence, authenticity is arguably one of the few characteristics that sets us apart from computers. But is being ‘yourself’ really that straightforward? We sat down with Program and Events Manager Alina Kilian to discuss how young companies can build their brand image and create an authentic culture.

Alina Kilian — Program and Events Manager

So Alina, what sparked your interest in this topic?

Well, I was studying New Media Marketing at the University of Applied Sciences in Darmstadt and after spending some time in both Tel Aviv and Silicon Valley, I developed a strong interest in startups. Consequently, I wanted to write my thesis about something related to startup culture and marketing, and after deliberating with TQ Co-Director Thomas Funke, we decided to explore the success factors of bootstrapped startups. We concluded that it all came down to authenticity. This seemed paradoxical to me, as authenticity and company culture tend to be a product of an organisation’s historical background, something that is carefully crafted over the course of many years. Since startups have no history, I was desperate to get to the bottom of this enigma.

Which startups did you focus on?

I analysed four bootstrapped startups that had managed to grow steadily and that had a strong brand presence in Germany: Mymuesli, Freeletics, Urlaubsguru and Fritz-Kola.

And what exactly makes a startup authentic?

The founders seem to have the most significant impact on a company’s authenticity. They are the ones who create the vision and the strategy, setting the tone for how the company is run, which in turn influences their output. Curating your brand image is extremely important and many CEOs place too much stress on other factors, such as the quality of their products. Take a look at Apple for example: their products are no better than those of their main competitors, but due to PR efforts and the authentic culture of their brand, the quality of their products is perceived as being higher than it actually is. The founders of Fritz-Kola certainly seem to have recognised the importance of maintaining this image, as even their appearance aligns with the company’s vision: Their long hair and unkempt clothes reflect the brand’s ecological and alternative stance.

What other common trends did you observe?

Since these startups didn’t have the means to spend on marketing, they relied heavily on PR and word of mouth. But precisely the fact that they were bootstrapped, became a major selling point, and telling their down to earth founder story again and again was fundamental to their success. Fritz-Kola insists that they started with 7000 euros, produced one crate of coke, went to a local bar and asked: ‘Hey, do you wanna sell this coke?’. Supposedly they sold 10, used that money to produce the next batch and that was that. Mymuesli claims that hearing an outdated granola advertisement on the radio inspired them ‘bring muesli into the 21st century’, and despite having five other startup concepts with established business plans, they ‘just fell in love’ with the muesli idea and ‘followed their heart’. They constantly emphasize the fact that they were just a couple of passionate students, working out of a small apartment on the fifth floor, weighing out and packing each order individually. To put it simply, people would much rather hear a self-made, rag-to-riches story along the lines of: ‘I sold hand-packed muesli out of my apartment for two years and now I’m a CEO with 800 employees’. This is something Fritz-Kola are very aware of too: Even now that they’ve scaled to about 200 employees, they still tell people that they’re a team of thirty.

They’re not authentic then — they’re lying in order to construct an ‘authentic’ company image

Well, that’s just little white lie — in general, customers are quick to recognise dishonesty and one has to tread carefully. Even if a seemingly great opportunity arises, it would be wiser to turn down the offer if it does not align with your values. Fritz-Kola, for example, could have increased sales by selling their products through Aldi. But since Aldi does not sell glass bottles, that would mean switching to plastic. If you look at Bionade, another ‘healthy’ drink, this decision lead to the downfall of the company. After they were bought by Radeberger, they converted from glass to plastic bottles and started selling them through discounters. They’re almost dead now. The packaging no longer aligned with the values they were communicating, so they lost their authenticity. In order to maintain authenticity, you also have to be clear about your shortcomings. On their website, Fritz-Kola state that although they would like to be 100% sustainable, they’re ‘not quite there yet’.

Is it more beneficial to be customer oriented or product oriented?

When looking at the case studies mentioned above, it seems that being product oriented is key. Take Freeletics: their vision was to create the most intensive workout possible without the need for gym equipment. Investors told them that the difficulty level of the exercises was not suitable for the masses, and that therefore they would not scale. But after sharing their plans with clients in Munich the response was overwhelmingly positive, so they started publishing one free workout plan per week. After the third week they stopped and, to their surprise, were bombarded with requests for the 4th plan. They decided to sell the next workout for 1 euro, made half a million and used that money to create an app. It seems all the bootstrapped startups we looked at started with an idea for a product, tested it and then developed it.

Did any of the startups do market research?

Only Mymuesli did market research and, incidentally, their findings were not in favour of the product. In general, companies that are too customer focused tend to come across as inauthentic, being overly fixated on the wants and needs of others rather than their own vision. Considering the current trend of customer centricity and heavy focus on feedback, this was a very unexpected finding. Speaking of customer centricity, customisation proved another interesting topic. When Mymuesli included the option of allowing customers to name their own muesli blend, they noticed a decrease in sales, so they decided to change the concept slightly and included a random name generator button instead. It became the most clicked button on the website for the next year and sales increased by 30%. So even though people love a customised product, they don’t want the burden of having to customise it themselves. Customer centricity is important, but not to the extent that you sabotage your brand individuality.

Thank you for sharing your insights Alina. Find out more about our diverse team here: https://techquartier.com/about/team/