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Brand Strategy For Startups

3 Value Equations For Startup Brands

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Defining value for startups and emerging brands

Founders of startup companies often focus on their product/offering and their business/distribution structure. Both though are expressions of the question that every startup should really be asking itself first: “What will we be valued for?”

In a very useful article on how to develop and articulate a value proposition, Derrick Daye makes this point, “Those entrepreneurs who eventually grow up to dominate their market represent a compelling “idea of value” in the minds of customers that is simply not available from the alternatives in the category.”

Every business makes an offer and has a structure. Value is different – it’s implicitly linked to what other businesses don’t offer. The startup businesses that will succeed are those that can deliver beyond or before their competitors; often beyond or before their prospective customers’ expectations. That’s not something you can find by just starting. And it’s not something you can create by marketing. It’s something you need to identify in order to start. For all the reasons you can give as to why your brand deserves to succeed, the cruel reality is that you only stand out when and where others think you do.

In broad terms, there are three different types of value equation for startups:

1. New value hinges on introducing a new concept. This is the gamechanger space. It either answers an old need in a completely new way or brings a new way of doing things to market that perhaps wasn’t possible previously. Its advantages may be technical, conceptual or, increasingly these days, ecological. A lot of start-ups claim to operate in this space. Very few though are this radical.

2. Improved value – or tangible value. Beyond the press release hype of new business announcements, most new businesses, and the products they offer, are grouped here. They are looking to rethink or revitalize a concept that consumers are familiar with, but perhaps frustrated by. This “second to market” strategy (not a term that should be taken literally) is about building on an established or establishing need and adding to it – either by providing something that hasn’t been available up until now that consumers really want, or by radically shifting trading parameters like pricing or availability. This is a very difficult space in which to succeed, because too many startups enter the market this way with a collection of features looking for a consumer. Companies with this value equation can quickly find that an idea is not a business. On the other hand, those that can bridge the shortfall between what consumers want next and what they’re offering can make swift progress.

3. Perceived change of value. These brands look to redefine the emotional rewards of the sector. They transform how consumers feel about what they’re getting in ways that the incumbents can’t, haven’t thought of, or won’t. While we often think of this as upscaling, particularly through design, perceived value can of course go the other way. It can “democratize” a previously exclusive or reclusive sector by making it much more accessible. Or it can introduce a much-needed attitude into a sector that acts as a breath of fresh air in the minds of buyers. It’s all about, as Daye observes, delivering higher levels of “use value” in the minds of customers than they pay in cash value. Finding an emotional disruptive value-point stems from really understanding the psychographics of your audience. As brands continue the search to be more human, and as commercial interactions become more personalized, this is where more and more startups will need to be looking for a distinctive starting point.

It’s important to point out that these three value equation types are not mutually exclusive. The smartest startups will look to combine at least two of these areas of value generation into their approach. For example, they may introduce a shift in perceived value (emotional) and back it up with a long-tail search for improved value (improvement) that reinforces the position they have established. Or they may look to completely alter the boundaries of a sector (new value) by redefining the subjective basis for evaluating worth in that sector.

The role of strategy is to identify future value – therefore knowing the type of value you are looking to deliver, not just now, but five years from now, will fundamentally define your strategy and the positioning of your brand.

What will your company do to the dynamics of the sector?

Will you be the change driver (and if so, for how long)?

Will you be the improver, the value-adder (where, how and why)?

Or will you be the emotional re-calibrator (and how will you build on that?)

If you want to be and remain valuable as a brand, start as you mean to continue.

The Blake Project Can Help: Brand Strategy Workshop For Startups

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education

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1 Comment

Manaf Marouane on June 16th, 2015 said

I agree, startups must invest in their brand from the beginning.
When different startups offer the same service, an easy way to differentiate them is by their brand.
It’s not money investment but time investment.

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