Practical Thoughts on Branding for Software Startups

Who are we?  What does our brand stand for?  What promise does our brand make?  These are some of the questions that quickly come up when thinking about branding.

In general, I think branding is a potential marketing rathole for startups, particularly early-stage ones.  See my post entitled, If Rebranding’s The Answer What Was The Question?

Do want to build a brand?  Go sell some software.  Want to improve your brand perception?  Go sell some software.  Want to have a distinctive brand visual territory?  Go sell some software.  You see the pattern.

Some startups put the cart in front of the horse.  Don’t do that.  Found a company.  Create a product.  Get product-market fit (PMF), i.e., determine some problem you solve for some person with some product.

You don’t need a brand before you have PMF.  Go get PMF.  Go sell some software to prove there’s a market.  Then you can start thinking about branding.  Then people start to wonder about some of those brand-y questions, like who are you and what do you stand for?

In this post, I’ll use a six-point branding framework and share my thoughts on how each element applies (or doesn’t) to startups. After that, I’ll discuss some important brand concepts that don’t explicitly fit in the framwork.

Our framework contains the following elements, which I’ve re-ordered according to their importance to startups:

• Brand targeting
• Brand promise
• Brand positioning
• Brand identity
• Brand values
• Brand voice

Let’s share some quick thoughts on each.

Brand Targeting (Who Do We Sell To?)
This is brandspeak for figuring out who you’re selling to.  Back when I went to b-school, they taught the acronym STP (segment, target, position), which I’ve always liked both for its simplicity and its explicit order:

• Figure out a mechanism to segment the market — e.g., by company size, by vertical industry, by adjacent systems
• Target one or more of those segments.  For startups, fewer is better.
• Position your product to those target segments.

As I’ve always said, the first step in building any presentation is to think about the audience.  If we don’t know who we’re selling to, we don’t know what to say.  For startups, determing the target is an important part of PMF (the person part of person/problem/product), so figuring it out will require some degree of  experimentation (aka, spaghetti throwing or emergent strategy).

Brand Promise (Why Do They Buy From Our Company?)
This is brandspeak for the high-level expression of why someone should buy from your company, often more simply known as the value proposition.  For tech startups they tend to fall into a few patterns.  (I’ll use my semi-informed perception of next-gen EPM vendors as an example.)

• We are you.  By FP&A for FP&A (e.g., Mosaic, we built it for ourselves at Palantir).
• We fixed it.  We took the last-generation leader and made it better (e.g., Cube to Adaptive, Pigment to Anaplan)
• We rebuilt it.  We run on the modern stack with modern technology (e.g., OnPlan to Vena)
• We verticalized it (e.g., Plannuh for marketing, Place for SaaS)

This is not product positioning; we cover that next.  This is a high-level, one-line statement about why to do business with your company.  Other examples:

• Skyflow:  what if privacy had an API?
• Hex:  a modern platform for data science
• Cyral:  the last line of defense for data

Brand Positioning (Why Do They Buy Our Product?)
This is product positioning.  Many people start with the Geoffrey Moore positioning template, but I think that’s a bit heavy and includes things other than strictly positioning (e.g., targeting).  Ultimately, positioning comes down to answering one of two questions:

• Why buy one?  (Benefit oriented.)
• Why buy yours?  (Differentiation oriented.)

Startups who are alone in defining their category need to focus on the first question.  Those in crowded categories (either a new market with several nascent entrants or a more developed category with the usual suspects), the emphasis needs to be on why buy mine.

Some early-stage startups actually need to focus on both, ending up with a dreaded two-phase sales cycle:  first convince the customer to buy one, and then the customer starts a formal evaluation process where you need to convince them to buy yours.  (Try to avoid this by selling to business leaders who can pull the trigger at the end of the first cycle.)

The Brandier Part of the Framework
This is the point in the framework where we go from commonsense startup strategy (with more brand-y naming conventions) to the world of pure branding.  Spending too much energy down here, below this line, can waste valuable time and energy.  Let’s understand what these three elements mean and think about how much to invest in them.  We’ll then conclude the post by talking about some important brand concepts that didn’t explicitly make this six-part framwork.

Brand Identity (Do We Look Like Us?)
This is the world of visual identity — e.g., color palette, logo, fonts, imagery.  This answers the question:  do we look like us?  This is important, but it’s table stakes.  You’ll never win deals by having a better visual identity than another startup, but you might well lose them if you’re seen as unprofessional, cheap, or rinky-dink.  Invest enough to look good and keep up with the Joneses.  But not a penny more.

Brand Values (What Do We Stand For?)
This answers the question:  what do we stand for?  For startups, it’s largely about the company’s culture and values.  While both are often quite important for culture-building and recruiting, for customer buying decisions, well, not so much.  Make an about-us page, tell your origin story, share your mission, and list your values.  From a company-building point of view, the key thing (and the hard part) is living and reinforcing those values.  From a marketing point of view, you’re done.

Brand Voice (Do We Sound Like Us?)
This is the world of tone, and answers the question:  do we sound like us?  For consumer brands, voice matters a lot.  For tech startups, particularly those in enterprise, well, I hate to say it but everyone pretty much sounds the same.  We hire the same agencies, the same copywriters, the same product marketers as everyone else.  So this become table stakes once again:  invest enough to sound like everybody else and let what you’re saying, not how you’re saying it, be the differentiator.

Only one enterprise software company I can think of had a distinctive voice:  Splunk.  It was largely executed through clever slogans like, “finding your faults, just like your mother.”  While I’m sure their marketing team had fun with this, they did it on the side, after doing all the core marketing required to build a great business.  Don’t invert that prioritization.  The easiest way to avoid problems is to put zero effort on differentiation via voice.

Other Important Brand Concepts
There are two important brand concepts that aren’t in the framework explicitly, so I want to talk about them here:  brand awareness and brand perception.

Brand awareness (“What percent have heard of us?”)
Every CMO who has ever heard, “we’re the best-kept secret in the market” from their salesforce or, “you’re a hidden gem,” from your customer base will feel my pain here.

Awareness comes in two basic flavors (i.e., aided, unaided) and there are only two things I know about it:

• You can never have enough to make everyone happy.  Ever.  Someone will always have an opinion.
• You absolutely have to measure it.  The only way to fight subjective perception is with data.  So measure it.

In tech, aided awareness is more important than unaided (which is simply a very high bar) and, since larger vendors compete in multiple categories, you must measure awareness within a category.  Don’t ask:  “have you heard of Oracle?”  Ask:  “In the context of CRM tools, have you heard of Oracle?”

In fact, if you’re measuring awareness, don’t stop there.  Ask these whole-funnel questions — about both you and your key competitors — as well:

• Have you heard of X?
• Do you have a positive opinion of X?
• Have you considered buying X?
• Have you tried X?
• Have you purchased X?
• Have you repurchased X?

And then compare what this outside-in research tells you compared to the conversion rates in your CRM funnel.  You might find you’re guilty of navel-gazing.

Brand perceptions (“What do they think of us?”)
In software, once brand awareness is established, three brand perceptions are critical:

• Market leadership — are we seen as a market leader?  That is, as the safe choice in the market.  This is critical to risk-averse individual buyers and mistake-averse evaluation committees.
• Thought leadership — are we seen as a thought leader?  A market leader who lacks thought leadership may hold a temporary position atop the market.  The safest purchase has both.  Lack of thought leadership opens attack vectors for new entrants.
• Technology leader — are we seen as a technology leader?  Strictly speaking leadership is not required, but fast-following is.  Most buyers don’t need you to invent everything — many market leaders, from Oracle to Microsoft to Salesforce — are more fast-followers than leaders — but they do need to believe you are in-touch and evolving.  Tech laggards (e.g., SAP) become targets for replacement.

For more of my thoughts on branding, see my posts on Branded Features, If Branding’s the Answer what was the Question, and The Market Leader Play.

Branding’s fun.  If want to work full time on it, go to a top agency.  If you want it to be a big part of your marketing, work in consumer products as a brand manager.  In tech, well, learn about branding from the best, and then apply it delicately and where needed.