A startup branding thesis on cultural innovation and changing peoples’ minds

In a world of material abundance, what drives people is self-realization and the recognition given to us by others.

Founder self-expression pervades the venture world

Steve Blank recently posted an academic paper from NYU’s Leonard N. Stern School of Business. The research found that someone becoming an entrepreneur is largely attributed to a signaling imbalance to potential employers. The research proved that “Any individual has incentive to start his own venture if potential employers perceive his productive capacity as lower than he does”. Is entrepreneurship then largely about signaling to those same employers and everyone else that you are indeed capable and highly talented? I’ve personally met enough founders to be able to infer that they have much personal satisfaction from the “cultural capital” that they build along their journey. That’s how they win at this game. Not only that, but founders also love the sense of belonging to a community of other similar misfits and changemakers who accept them as their own.

Knowing that in the venture world the default outcome is failure, and that power laws largely favor the top 1% of startups, those founders work day in and day out to create a great product that they hope millions of customers will want to use. Through this act they set themselves on the path of becoming “someone that matters”. They imagine a day where journalists from TechCrunch and VentureBeat — and maybe even live audiences — are talking about their success. They breathe business podcasts and UX newsletters. They start consuming and creating content that is full of words and models that define the industry. They join the twitter conversation. They embody the “techpreneur” identity that others praise and respect. Their story to friends and colleagues is that they will improve the world because they can, almost like the great Steve Jobs did.

And that’s totally fine, even maybe remarkable!

But that’s not the point I want to make here. I only wanted to talk about that so that if you — dear reader — do identify as a techpreneur, then you really understand the concept of how self-expression occupies your worldview and motivates your daily decisions.

Your customers’ journey to self-realization is also your opportunity

Here’s the real topic of this essay: Your prospective customers also want to become great electronic artists, animal helpers, celebrity private trainers, environmental activits, gamer geeks etc. They too want to matter to their friends and colleagues. They too enjoy signaling their belief systems, and making a name for themselves. They too want to be part of communities that stand for something bigger than their ego.

This form of expression and signaling is one of the most important psychological concepts in today’s world. As Hanzi Freinacht of Metamoderna.org and author of “The Listening Society” puts it, having access to and knowledge about certain societal symbols builds cultural capital — and that’s the new basis of power in society. According to him, “cultural capital is beginning to dominate economic capital in the new dig­ital, postindustrial age.”

So what does this mean for you?

It means that if your startup is helping customers build personal identities that improve their place in the world, then you’re tapping into the heart of their consumption decision-making and pulling them towards your product.

I believe the graphic below goes deep into the concept of customer self-realization.

Your customers want to become awesome, but it’s not only up to your product — that’s where your brand also steps in. That the product communicates something about the customer’s ideal self matters much more.

In other words, your brand would join the customer’s journey of “becoming” and therefore generates a sense of attachment and strong loyalty, which are major drivers of brand power. According to Keller’s theory of brand, “resonance sits at the top of the brand equity pyramid because it’s the most difficult — and the most desirable — level to reach. You have achieved brand resonance when your customers feel a deep, psychological bond with your brand.” In addition, James H. McAlexander — a professor and ex-consultant for Harley-Davidson (who excel at this kind of branding) — believes that brand communities also lead to the formation of a strong brand resonance due to a knowledge of the brand and the social ties developed with other consumers from being part of a community.

What’s more impactful to your startup is that brand resonance creates the best kind of defensibility. Let’s face it, you won’t succeed long-term without having some kind of defensibility — and VCs won’t give you their money if they don’t find moats in your business model. Yet technology moats can today have higher fade rates (the rates at which moats atrophy) and can disappear as fast they’re created. Your product will be easy to copy as software-building tools become commoditized; being the first mover is not enough; network effects don’t come into play if your product doesn’t relate to users’ emotions, or worse, they fade over time (For example, the pace of generation Y people who stopped using Facebook is highly alarming). The way to really lock-in customers is to permeate their belief systems. It’s to keep them interested in your narrative, to keep them following your social media channels and to make them part of your “club”. Once your brand is engrained into the collective psyche, it’s really hard to lose that — unless culture itself changes.

Cultural branding is a way to win hearts and minds

Former VP of Minted, Namrata Patel, introduces the relationship between branding and culture very well: “More now than ever, consumers, particularly millennials, are spending their money on products not only for the functionality they provide, but also for the meaning they convey. Purchase of the product signals not just your taste, but also your personal values (that you care about promoting sustainability, environmental protection, global consciousness, economic development, and fair wages, or supporting local makers, independent artists, female founded companies, etc.” Sidney Levy introduced this same idea for the first time in 1959 and postmodernist philosopher Jean Baudrillard followed suit in 1981. Indeed it has always been the same human behaviour, yet has evolved in an increasingly digital world due to more direct and rapid social feedback loops. It’s simply easier to construct your persona online. Many other marketing academics, most prominently Dr. Kritsadarat Wattanasuwan, have expanded on this notion writing about sociocultural signaling through consumption and brand choices.

In the same way, a very interesting HBR article by Douglas Holt argues that brands in the social age should tap into the rise of crowdcultures that champion novel ideologies (such as new urbanism, preindustrial food, modern masculinity, 3D printing…) After the paper talks about the failure of branded content marketing to garner consumer interest online, it then suggests that “To solve this puzzle, we need to remember that brands succeed when they break through in culture. And branding is a set of techniques designed to generate cultural relevance.” Holt maintains that building iconic brands is done through becoming cultural innovators — at the same time augmenting identities and challenging behaviours.

Ogilvy’s Big Ideal branding framework builds upon Holt’s ideas and is also based on the fact that “customers want something to believe in”. The big ideal is the intersection between a cultural tension point and how the brand authentically believes the world could be better. They preach that finding cultural tension requires having ethnographic and anthropological abilities, which breed “a certain point of view on the world that engages people both within and beyond the organization”. Their examples point to Coke’s humanitarian advertising which was created against the backdrop of the Vietnam war, and Louis Vuitton’s Exceptional Journeys campaign which was born against the backdrop of commoditized and queue-ridden air travel.

These three theories merge together around the inevitability of winning brands to engage customers who, through being part of the brand’s community, builds cultural capital. The real-life startup case studies are many. Think of:

  • AirBnB’s belief that humans need to belong anywhere and become citizens of the world, spreading through their branded advertisments
  • SpaceX’s belief that humanity should populate Mars and ultimately the whole universe, spreading through Elon Musk and his influencees
  • Casper’s belief that there should be a scientific discussion around better sleep and comfort, spreading through magazines Van Winkle and Wolly
  • KiwiCo’s belief that children should be globally conscious and empathetic to other cultures, spreading through their products and content
  • Viome’s belief that illness should be optional and that chronic diseases are due to imbalanced gut microbiotas, spreading through testimonials
  • Lemonade’s belief that insurance is a broken model and can be fixed through social impact, spreading through social media marketing
  • Robinhood’s belief that investing in the markets should be accessible to everyone and free, spreading through word of mouth virality
  • Ollie’s belief that pets should eat human-grade food and that it would make them healthier and happier, spreading through crowdsourced and influencer marketing

Let’s get realistic on the “HOW” of cultural branding

And let’s start with an easy-to-read graph:

First:

  • Understand the ideas behind emerging cultural beliefs. Collect data points and insights about new ones that are growing and/or that you think will spread.
  • Build this as a strong personal conviction and make it part of your startup’s vision (It’s likely that it’s already there but you haven’t thought much about it).
  • Build a brand strategy that is based on talking to whom already converted into the belief model. Reinforce commonalities between your identity and theirs. Validate and make them feel good about their ideals. These are people who will naturally gravitate to you when they see you’re speaking their language.
  • At the same time, study what were the psychological triggers that made those customers adopt their new way of life, and try to build experiences that empower them and their cultural movement. This will achieve the first step, which is building a customer base that loves you.

Second:

  • Gaze into the future and place a bet on where you see a certain trend heading in the next 5 to 10 years.
  • Evolve your brand strategy as a way of helping others transform themselves and gain a certain way of self-expression by adopting your company’s beliefs as their own. Grow the cultural movement by changing minds and show customers how your brand will improve their concept of self.
  • Make your brand a catalyst to the cultural storm that will provide a tailwind to your startup’s growth. This way, you create an interrelation between the idea that has been spreading and your brand spreading the idea further. They feed each other as more and more people are taken by the rising tide.
  • From a macro perspective, we are seeing marketing, media and commerce converging — which gives your brand the opportunity to become more resonant through content marketing and rich product experiences.

The second step of changing your customers’ minds is closely related to what Mark Bonchek points to in his HBR paper called “Don’t sell a product, sell a whole new way of thinking”. The crux of his essay is this: “Companies that successfully market and sell innovation are able to shift how people think not only about their product, but about themselves, the market, and the world.”

Changing minds plays a huge role in creating demand

Shaping new beliefs increases your Total Addressable Market. It helps unlock new demand by converting strangers to believers using the elements of persuasion and emotional appeal. No sector analysis report will capture that kind of shift inside consumers’ minds and predict the TAM for you. You are in charge of this story and of inspiring people to adopt a new way of life. Commenting on market size, Benedict Evans of a16z writes that “saying that you’re aiming for x% of a $ybn industry is unambitious — great companies change the y, not the x.”

Shifting customer perspectives also shifts their spending habits. There exists a massive value capture opportunity for startups who are expanding markets or designing new ones. The former creates non-zero sum games. The latter additionally makes sure that the threat of rivalry is very low — competitors either avoid you as you’re not playing in their space, or face organizational trouble in shifting from their current worldview to play in this new market space. As famous investor Peter Thiel says, “Don’t always go through the tiny little door that everyone is trying to rush through… maybe go around the corner and go through the vast gate that no one’s taking.”

A shared company-customer belief system ensures a “top of mind” brand. In an economy of scarce attention, the only way to garner attention is to say something mind-blowing that breaks previous assumptions. That’s really the prerequisite for someone to stop scrolling through thousands of posts on their social feeds and listen to what you have to say. And when there is no noise around your message, there is more likelihood that your brand resonates with people. If you are truly helping them self-realize, those people will then become your ambassadors and ultimately spread the message further.

Finally, here’s a personally photoshopped letter from me to every startup founder out there

Jad El Jamous,

December 26th, 2018