The Basics of Branding for Startups

How brand strategy plays into product adoption

You have a product. You might have some early signals of product-market fit. But how do you make that product and the organization you’ve built stand out?

Ally Fouts, a creative director at Viget, a design and engineering firm that has worked with Initialized companies, gave an in-house presentation to several dozen Initialized Capital founders last week on how branding works, why it matters to startups and when early-stage companies need to start caring about it.

She covered:

  • What makes someone adopt a product
  • How brand advances product adoption
  • What a brand strategy is
  • How it applies to your startup
  • How to get started
  • How you’ll get out what you put in

You have a product you want people to adopt. Now what? Let’s think about what makes people adopt products.

Logic + Emotion drives product adoption

Logic is about the product’s attributes. Does it have functionality that fulfills a customer need?

Bleach is a product that a customer might adopt by fulfilling a logical need. For example, “I have evaluated this product’s attributes and functionality and have decided that it fulfills my needs. I want it.”

Emotion is about the way a product makes you feel.

Gucci perfume is a product that capitalizes more on the emotional motivation for product adoption. For example, “OMG I love the way this product makes me feel. I want it.”

So how does branding fit into product adoption?

Your brand is not your logo.

Your brand is how you communicate in a clear and compelling way

  • Who you are
  • What you do
  • Why you do it
This is not Casper’s brand.
This is Casper’s brand — the way they communicate who they are, what they do and why they do it.
This is not Warby Parker’s brand.
Warby Parker’s packaging, website, shipping and everything else they do communicates who they are.

Your brand is your organizational story.

But why does an organization need a story?

Stories help us understand.

  • Our brains are hardwired to detect patterns, which is how we discern meaning.
  • We detect a visual pattern and we know it’s a face.
  • We detect an audio pattern and we know it’s a friendly greeting instead of a hostile one.
  • We detect patterns in information (or stories) and we better discern the meaning of that information.

Stories help us make decisions.

  • Stories simplify information, which makes life easier on our dorsolateral prefrontal cortex.

Stories make us feel and act.

  • When we hear or see a story that captures our attention and transports us into the world of the story, our brains release oxytocin, which makes us more sensitive to social cues around us.
  • In many situations, social cues motivate us to engage to help others, particularly if the other person seems to need our help.
  • We start to feel what the subjects in the story are feeling and often act upon those feelings

Brand stories help your customers:

  • Remember and understand you.
  • Make decisions based on that understanding.
  • Like you, help you, and become willing to associate themselves with you and respond positively to your asks.

So what’s a brand strategy?

If your brand is the distillation of your organizational story, then your brand strategy is how you make your organizational story come to life.

There are two ways to make your organizational story come to life: communication and functionality.

Let’s look at Chipotle:

Chipotle’s brand is about “food with integrity.”

Let’s take a look at how they demonstrate this in both their communication and functionality.

Method 1: Communication

Chipotle’s messaging on external advertising takes an honest and straightforward tone. It’s a different type of billboard, where they talk about locally sourced and organic ingredients.

In appealing to logic, Chipotle’s messaging helps customers understand that their food is better because it doesn’t have antibiotics or hormones and the animals producing the meat and dairy products are raised outdoors.

In appealing to emotion, Chipotle’s tone is funny and honest.

Chipotle tells the story about their “food with integrity” through billboard marketing and in-store messaging that emphasizes organic ingredients and the use of meat and dairy products without hormones or antibiotics.
This messaging appeals to both our logic and emotions.

Method 2: Functionality

Chipotle also brings its “food with integrity” story into its locations. All of the materials are natural — there is metal and wood, and none of the bright colors or plastic surfaces you might find in a typical fast food chain location.

You can see this story coming to life in the way they structure food delivery. None of the cooking is happening out of sight. All of the food is made in front of you.

All of the materials in Chipotle’s locations are natural — there are metals and wood, and none of the bright colors or plastics you might find in a typical fast food chain location.
None of the cooking is happening out of sight. All of the food is made in front of you.

When you make your organizational story (or brand) come to life (using brand strategy) via communication and functionality, you are talking the talk and walking the walk.

“Talking” or communication might mean your product’s error messages or copy. “Walking” might mean your product or service’s functional experience — the level of friction in your checkout flow — or whether you are doing something that people actually want.

So what does this mean for your startup and how do you get started?

Assess your current branding situation.

First, you’ve got to honestly assess your current branding situation. It is not a smart time to engage with the topic of branding, if your product isn’t a market fit or if your business is a dumpster fire. Remember: great branding won’t fix a bad product.

Second, do the easy stuff first.

  • Buckle up and just try to stay consistent. A huge part of the value of branding is just figuring out what you’re going to say and doing a consistent job of saying it.
Another thing you can do is run through a group exercise of defining what your brand is and isn’t.

Third, identify your core set of brand attributes and your primary communication problems and goals.

One of the first exercises Ally and Viget does with many of their clients is a group session featuring more than 100 laminated cards with adjectives printed on them (and/or blank cards, with which to create your own.).

The group spreads the cards out on a big table and asks the clients to select the most relevant words into three groupings:

  • “We are”
  • “We are not”
  • “We’d like to be”

From there, they dig into tough conversations about the direction of the company, product, and brand, to determine a final set of ten key brand attributes that will guide the rest of the brand strategy process.

Then they do a similar exercise to establish a core set of communication problems and goals. The key is that these problems must have communication solutions. Remember: “Nobody wants our product,” is not a communication problem. Even the best communication can’t usually compensate for an inadequate product.

From there, you can start brainstorming ways to articulate your brand in a clear and compelling way that explains: 1) who you are 2) what you do and 3) why you do it.

From there, you can start shaping your brand strategy. If you have designers and writers in-house, they can start building your brand guidelines using your core brand attributes, communication problems and goals with the brand articulation statement as their foundation.

The mindset required for building your MVP (minimum viable product) and the mindset building your brand are totally different.

Branding is about consistency and confidence, while developing your MVP is often about experimentation and iteration.

It’s OK if shifting gears into thinking about branding feels weird, uncomfortable and strange — embrace it.

That said, when executed well, your brand can give you instant credibility. Your brand allows you to always be pitching. Your brand will be selling you before you walk into a room, after you leave, and even while you sleep.

Audience & Founder Questions

A few Initialized Capital founders had some questions afterward. Andrew Sather, a part-time partner at Initialized who works with many portfolio companies, shared some insights.

Q: Pricing can be really expensive for some top-tier firms. Are they worth it?

Andrew Sather, Initialized part-time partner: There is some intentional mystification when it comes to branding, especially at the higher end of the market. The reality is that high-end firms can charge what the market will bear and there’s a line out of the door anyway. It can cost $200,000 to $250,000 to get into the door.

There are also plenty of excellent, smaller firms willing to develop your identity, brand architecture and even some visual collateral for starting at around $30,000. The key is to find a firm whose previous work you like, whom you think you’d like to work with, and whom you can afford.

Q: When does it make sense to get spend $250,000 on branding?

Sather: There are so many variables and dimensions, but the earlier you do the work on consistent branding, the less expensive it will be. If you are extremely well funded, need to enter a mature market or create a new category in a big-bang sort of way or have a lot of user touch points, it might make sense to spend $250,000 or even more, on your initial branding.

Q: Is there a linear relationship between what you pay for your branding and what you get?

Sather: The companies that are spending that much on branding are usually companies that are also spending a lot on paid advertising — for example, think about how much Casper needs to spend on marketing every month. So it’s hard to disentangle the two.

There are, of course, many stories of companies that have paid a lot and gotten bad results.

There is a reason that some people in the industry are paid way more than everybody else. That said, in an early-stage company’s case, it may be better to work with a small or medium-sized studio that is going to give you a lot of attention rather than a well-known firm that is going to put the ‘B’ team on your account.