Startups face multiple challenges in the initial stages of their existence, characterized by resource constraints, they encounter – financial, legal and reputational risks. Gaining traction in the market, and scaling-up is the main thrust of any such business. Most start-ups come into existence on the basis of an innovative idea for a service or product, presented in the form of a business proposition. The consequence of this is - how do they establish this ‘new' idea/concept or product in the chosen market. A bigger question to answer is also the reputational non-existence of the start-ups when they are relatively unknown to most stakeholders and publics - relevant for growth and success. This chapter explores the relevance and importance of branding for startups based on literature and industry cases. The chapter concludes with outlining directions for brand building in the context of both B2C and B2B startups.
If you are not embarrassed by the first version of your product, you’ve launched too late. -Reid Hoffman (Founder of LinkedIn)
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Branding as a concept as well as a tool and brand building activities thereon are considered important pillars of modern marketing. Traditionally, brands and branding activities have been associated more intently with marketing effort targeted at end customers in the B2C markets. However, there is a growing awareness of the virtues of brand building in the B2B arena as well. Brands are supposed to serve B2B markets for precisely the same generic purposes as it meant to achieve in B2C or consumer markets. This namely encompasses – facilitation of product identification by buyers of products, services and businesses as well as creation of differentiation against competitors (Anderson & Narus, 2004).
Commenting upon the importance of brands for corporations Steenkamp (2014), posits brands as the ‘lifeblood’ of companies as they are instrumental in – generating market share, increasing customer loyalty, amplifying channel power, enabling larger profit margins, and helping to guard against competitive attacks.
The importance and challenge of establishing a successful brand has led authors to say that - as far as marketing as a profession is concerned “perhaps the most distinctive skill of professional marketers is their ability to create, maintain, enhance, and protect brands” (Kotler & Keller, 2007, p. 157).
Expanding the ambit of this discussion further, within this framework, there is also a need to look at the special category of organizations that may benefit from branding and brand building effort, namely the startups. Startups are unique in the way that they usually come into fruition with an individual or a very small group of people getting convinced about an idea whose time they think has arrived and which has a market which is worth pursuing as a business model. Another category is when an existing company or entrepreneurial venture, which is relatively well established, plans to enter into a new business/category and to realize this plan creates a new company.
This chapter is focused upon the former category of startups wherein the founders are not part of an existing company and are endeavoring to create something from scratch.