Tech Founders Telling Their Stories
After searching extensively through surveys, analyst reports, trusted media articles, founder interviews, and industry reports, our collective research findings have concluded that there is not a significant amount of preexisting and publicly available hard data which helps to show that founders value their company's story, but they don't devote as much time as they should to developing and understanding it. This is because, while we have been able to successfully locate some related insights, the majority of available information that pertains to the topics of startups and branding/storytelling is information that focuses on giving advice and guidance to startups on why branding is important and why founders should focus on it, but very little insight has been located that comes directly from the founders themselves regarding how much time they spend on branding, or whether it's important to them or not in terms of being valuable. Overall, the insights we located appear to the point to this topic in the following ways:
1) Startup founders, particularly in the earlier stages of business development, do not appear to be particularly focused on the importance of developing a branding strategy that centers around the company's story. While the reason behind this hasn't been directly stated, we assume this is likely because startups in the early stages would tend to be more focused on product development, rather than brand development.
2) Startup founders who have expressed a high level of value surrounding their branding and company storytelling strategies, also appear to be the ones who also focus on these topics and use them to push their brands forward. In cases where we have identified startup founders who focus heavily on branding developments early on, our research findings suggest that these startups go on to become more successful in the long-term, while startups who don't focus on brand development early on tend to have higher rates of failure.
Overall, what our research findings suggest is that whether a founder chooses to focus on brand development or not is less often tied to their time availability and is more tied to the level of importance they place on the idea of brand development overall. Down below, we have identified some case studies and insights which help to support both of the above statements. Additionally, our research findings have revealed some insights on topics which we assume are related directly to a startups branding/storytelling efforts, or lack thereof, with regard to the founder's perceived level of importance, and also some insights which help to show that many startups who do not focus on these initiatives end up failing for reasons which we assume could have been prevented if the founder had spent more time focusing their branding/storytelling efforts.
Below, you will find a deep dive of our findings. Please note that during this research we will refer to the term 'brand development' and 'branding' in reference to a how a company tells their story.
In a 2017 survey of startup founders where over half of the respondents had startups that were only between 3 and 5 years old, 17% said they "fear missing product-market fit," which we assume is an issue that can be related to poor marketing as the result of weak brand development. This means that 83% of startup founders aren't necessarily concerned about how their product will fit into the current market, and therefore we assume they are too preoccupied with other areas of business to focus on this particular topic. (Calculation: 100-17=83). For example, when asked about the mistakes they made in regard to business growth, around 21.3% of founders stated that their "product had too many features," while 19.4% said they "picked the wrong market," and 15.5% said they "chose the wrong business model."
Even in regard to pitching their marketing strategy for the purposes of gaining funding, 40% of startup founders who reported struggling with fundraising said that they "botched their go-to-market strategy." Despite this, 69% of founders stated that they are concerned about customer acquisition. Overall, these findings seem to be painting a picture that shows while founders understand the importance of growing their customer base, their marketing decisions are likely not yielding the results they are looking for.
The overall lack of insight regarding how these founders feel about brand development could also suggest that they aren't really focusing on it very much, and therefore it isn't being discussed very widely amongst them. For instance, at a recent conference, Brit Morin, the founder of Brit + Co, a web-based education and media company, stated that "about 80% of startups probably don’t think about brand for the first year," and she added that this is particularly true in Silicon Valley.
Additionally, our research findings show some interesting insights that allude to the fact that startups are also lacking focus with regard to employer branding, particularly in regard to diversity and inclusion. For example, when asked if their company had "talked about diversity and inclusion internally and externally," 46.6% said they had only done so internally, while just 31.8% said they had done both. When asked whether their company has a diversity and inclusion promotional strategy, 58.6% answered "yes, but nothing formal."
Despite all of this, it does appear that once a startup begins to realize the importance of their brand development, the founders do take it seriously. For example, the founder of Credit Karma, a startup that has become wildly successful, didn't start out taking the company's brand development into consideration. He stated: "To me, it was this nebulous thing big companies spent money on without any accountability or metrics — it didn’t seem to make sense for us at the beginning.” However, after realizing the importance of branding, the Credit Karma founder and his very small team got to work on their brand strategy. Today, Credit Karma is "Googled more than Geico," and reports that 50% of their customers hear about the company via word-of-mouth. The company is valued at over $3 billion.
Despite the fact the numerous consultants and founders agree that brand development is important to a company's success, some founders evidently feel that brand development is ultimately out of their hands. For example, the founder of Under Armour believes that, "in some ways, branding is not something a company can control. It is all about how the consumer perceives the brand." In the early years of Under Armour, its founders believed that the product, in its usefulness alone, was enough to create brand loyalty. Under Armour's lead founder stated: "People like to talk about branding strategies, but I believe you have to earn the right to be a brand. Initially, as you’re getting to that point, you’re building products for your consumer base that they trust.”
Under Armour's founder is not alone in these beliefs. Johnathan Wu, a 30-year-old who is working on a 'tiny home' start-up company, approached this topic as both a founder and a consumer. "I only care about the product--who cares about the brand?" he said. "I am not loyal." As a millennial, Wu's statements ring true for the majority of his generation, in which 51% of report that they "have no real preferences between private-label and national brands," according to the Cadent Consulting Group. This is a significantly different attitude compared to older generations who are known for being brand loyal. These insights might also shine a light on the likelihood of millennial aged startup founders not placing emphasis on brand development. While the average age of successful start-up founders is 40, according to Entrepreneur, the 2017 State of Startups report which surveyed 869 startup founders showed that 36.8% of respondents could be considered millennials, due to the fact that were age 35 or younger. (Calculation: 22.8% + 11.5% + 2.5% = 36.8%). Assuming these figures are likely relative to founders as a whole (not limited to just those taking the survey) there are a significant number of millennial aged founders, and based on the insight that majority of millennial consumers aren't showing brand loyalty, we assume it is likely that a number of millennial aged startup founders also aren't focusing on brand development.
Despite this, startup founders from the older generations appear to realize the importance of branding and seem to be focusing on their company's brand development, which also appears to be paying off for them. For example, Nicholas Harris is the founder of Human Performance Engineering (HPE) Activewear is created a brand that has now "become a leading technical sports apparel brand that's sold in high-end stores ranging from Bloomingdales to Bandier." Harris already had a solid story line behind him when he launched his brand, as he had been working for 15 years as a "human performance specialist with Formula 1 Champions and Olympic medalists." This is what inspired his company, which uses high-tech materials to create clothing that "reduce fatigue, inflammation, and stress in the body to ensure optimum athletic performance." Harris says that his intentions for the company are to become a legacy brand and made the following statement regarding his company's brand strategy:
"I’d like for the brand to be here in 50 years’ time, which is long beyond me. I think the ingredients every great brand has are a good founder’s story, a unique and original logo, a strong brand identity and DNA, and a loyal customer base. And already at a very small level, I believe we check those boxes. I think once we build a narrative around each of those landmarks, we will be able to create a larger audience. I believe we can be a global brand that can stand the test of time. We follow the expression, 'You can’t win the race in the first quarter, but you can lose the race in the first quarter.' It’s not about how you start that matters; it’s how you finish that counts."
In Harris's case, we analyzed that he has a solid product that works and is pushing that product forward by telling his company's story through brand development. We assume that who Harris was before he launched his company and the story behind his company is giving his product credibility. It would appear that these two elements, working in tandem, is what it takes for a startup to be truly successful. To further support this idea, CB Insights recently conducted a survey which analyzed the reasons why founders said their startups failed. The number one reason given, with 42% of respondents agreeing, is what there was no market need for their product, while 19% said they were out competed, and 14% said the reason was due to poor marketing. We assume based on our collective findings, that a lack of focus around brand development played a significant role in these results.
In closing, our research findings suggest is that whether a founder chooses to focus on brand development or not is less often tied to their time availability and is more tied to the level of importance they place on the idea of brand development overall.