Why Startups Fail (And What You Can Do About It)
According to research, there are six major reasons why most startups fail:
They run out of funding
Inadequate Customer Research & Market Sizing
Ineffective Targeting
Inconsistent Messaging
Failure to Measure & Adapt
Poor Marketing Strategy
Said differently, if I told you there is a way to substantially reduce the risk of your startup failing and that it 1) is something you can initially outsource 2) is something that takes very little of your time away from your day-to-day focus and 3) is affordable, doesn’t that seem like a no-brainer?
Building an effective brand strategy IS that insurance policy. As a startup, building a cohesive and compelling brand is the single most important thing you can do for the long-term health of your business, yet many companies undervalue the need or are unsure of when to begin. Founders come from a wide variety of backgrounds, but many from very technical fields – computer science, engineering, physics, biology, etc – may not shift their focus to marketing until their product is “final” and ready to be commercialized, well after the point of maximum benefit. This is no slight to anyone. Startups are a LOT of work, and most people choose to focus on their areas of specialty. That’s exactly why outsourcing brand strategy can be so effective.
To clarify, I’m not just talking about your logo or your brand colors and font. A holistic brand strategy encompasses your values, your mission, your identity, your positioning and your brand promise. Yes, it’s critical to the effectiveness of the marketing and sales teams, but it also provides inspiration and direction to R&D, focus to operations, guidance to external vendors and can also attract investors and partners. Investing in brand strategy lays out who you are and why you exist as a business. It defines the market you expect to compete in and the size of that market. It defines your target customer and lays the groundwork for how to find them most efficiently. It provides guidance on what to say and how to say it to your audience. A brand strategy also lays out how to position your brand in the marketplace against your competition and can guide pricing strategy. It can clarify your own strengths as well as identify weaknesses in your competition that you can exploit. Last, and perhaps least considered, is that it SAVES you time & money in the long run by creating much needed focus. An effective brand strategy gives your brand differentiation, consistency and credibility, and investing in it as early as possible can even surface barriers that could sink you at launch if not addressed.
Even understanding all those things, a startup can’t risk running out of funding either and bringing on senior headcount too early can put a significant strain on cash flow. That’s where outsourcing comes in. Outsourcing your brand strategy with a trusted vendor can provide your business with senior-level marketing thinking and set your brand in motion well before you have to think about an executive search, equity packages and building out a marketing team (PS – not all CMOs are experts in brand strategy either). And while the work WILL require the input of key stakeholders, the amount of time you’ll need to invest is hours, not days, weeks or months.
When IS the perfect time to invest in brand strategy? Typically after your first round of funding, but before your second round. If you’re already past the second round, the answer is probably “now.” You’ll want to be sure you have a minimum viable product (MVP) and a basic business model, but any time after that is appropriate – the sooner the better. How much should you be prepared to invest? Crafting a comprehensive brand strategy for a startup (excluding design work) can take 100-300 hours depending on the type of business, the amount of competition and the target audience, so be prepared to pay a specialist between $15,000-$50,000 – but expect your investment to pay back on itself several times over. When they hand off the final document to you, you should feel comfortable in your understanding of the work AND be able to execute (or hand it off to vendors) based on the recommendations. More is not always better though! A trusted resource should right-size a strategy for your brand and also act as a mentor and coach throughout the process. You’ll want enough of a plan to launch your ship on the right course, but leave enough of a budget to be able to react to changes the brand strategy will uncover and also not delay any launch plans.
Endangered Species Marketing, LLC (ESM) is a brand and marketing consultancy established to help B2C businesses grow faster through smarter marketing. The goal of ESM is to help clients build a stronger foundation for consistent, compelling and disruptive messaging to ultimately drive greater awareness, purchase intent and loyalty.