Why only a few start-ups are able to create brands and most fail?

Brands like a few other things occupy a lot of my mind-space  more so since I got more interested in marketing, social media and start-ups. How brands are built and how in most cases even otherwise(including financially) successful businesses fail to build any brand.The bigger the brand a start-up has, the better it gets for getting more business, better employees, better partners/tie-ups so on and so forth. Clearly creating a brand is a wonderful thing for a start-up, which brings us to the fundamental question.

Why a few start-ups are able to create brands and most others fail/take considerably long?

I’ve been in the startup zone i.e working on, for and around startups for more than 5 years now (Haven’t made my millions yet *sob* *sob*) and have closely seen dozens of start-ups coming and going down. In my opinion here are the few things that work for startups that are able to build brands out of themselves(not in any order)

  1. Nature of business
  2. Positioning
  3. Personality of co-founders
  4. Customer Service
  5. Social Media
  6. Passion

Surprisingly I am unable to think of more things that determine whether a startup creates a brand for itself or not. Let’s take these one by one

    1. Nature of business: To drill down further what matters here is

      A. Size of the market: The bigger your potential customer segment, the bigger possibility their is to create a brand. A video sharing platform like Youtube/Vimeo will be a bit easier to build brands on that a document sharing platform like Scribd/Slideshare. Almost everyone I interact with (even the field boys)  know of Youtube and except for a few who run startups themselves, no one knows of Slidshare or Scribd.

      B. B2B vs B2C/C2C: Though it can also come under the Point 1 (Market Size) but I feel this should be listed separately.  B2C and C2c startups doing a decent job are more likely to be talked about than B2B startups doing about fine. A startup that sells insurance policies or gift items to corporates is less likely to be talked about as much as a startup that sells insurance and gift items directly to end users. Reason is obvious, the number of transactions, number of people touched, the viral aspect, the ease of referral and sale is higher in B2C or C2c.C. Nature of the product: Let’s say some products are more sexier than others. For ex: people would love to talk/share about buying a tablet/mobile more than buying a soap/washing powder or mosquito repellent. So if your start-up retails electronic items and people have a good experience with you, they’ll talk about it more than if your start-up sells detergents or sanitary napkins with an equally good experience. Also, because one might value or buy some products more (often) than others. People might buy more books/clothes than furniture in a given period. Thus more chances to talk about them.

      D. In built virality: Some startups have virality in their core. For example some social media sites like Facebook,twitter or even messengers like gtalk/bbm will make more sense once you have your offline network there. Thus, by default you are more likely to invite your friends over to them than let’s say do an app that takes care of your daily expenses or helps you record voice notes.

      E. Customer Experience:

      God is in the detail

      While it might come naturally to a few, most people won’t get it. A substantial component of creating brands lies in the attention to detail. The words on the new user registration email, the design of visiting card(mint picked Dialabook.in’s visiting card for a story), name of the company, the usability of your website/app, how well the search works, which products are promoted, intuitiveness in using the product (thanks to great design).


    2. Positioning:What your startup does and how is it different from others?”. The easier it is for people to figure that out, the better it is for them. What your startup does should be quite apparent.If you can’t explain what you do to your grandmom/parents, you *might* have a problem. How you are different from others off course is a criterion for an established industry. For example when the first few e-commerce websites were launched, differentiation was out of question but after a first few years your start up would be put to the differentiation test. “How is this different/better?”.Someone once told me(and I concur) “we do X better” mostly doesn’t cut it*You might have trouble explaining about your cloud based business or how your start-up is creating a genome database but that’s ok. In most cases it should not be that difficult to explain
    3. Personality of Founder/Co-Founders: Startups, their cultures and brands are a reflection of their founder/co-founders. Therefore whether a startup will be able to create a brand or not for itself is a function of the founders personalities. Just like someone who is more gregarious or glib talker will connect/network with more people than a loner their start-up will also be defined/limited by their own personal nature. Initially since it’s the founders reach that defines who all know about a startup, if a founder’s own network is small, very few people will know about it. Not only this, all of the following about founders have huge impact

      A. How active they are on Social Media
      B. How good can they express their product/service/ideas
      C. How good can they present in an event
      D. How good can they gel with new people (even if purely for the purpose of promoting their product)
      E. How well can they leverage their existing connections or previous job(s) and friend of friends

    4. Customer Service

      Though this is the most obvious point, I’ll reiterate.  How you treat your customers will have a huge impact on your brand. Not only great customer service ensures that your customers stick with you for long, it also ensures that they talk about you to their friends and if you are good they’ll sell  you to their friends for FREE.  All of the following add up in your customer service ratings

      A. Response/Turn around time of customer service calls/emails. The tone and content of your communication

      B. Community: Having a community of users/consumers that get a kick out of using/dealing with you is extremely important. You’ll get a sense of this in initial months. Once you have this going, you need to make them your brand ambassadors by giving them more reasons or incentives to talk about you to their friends. I remember how when we were building kwippy.com we had a dozen odd super passionate users from across the Globe. Once we realized that we started involving them in our decisions about the product. Put them in an email list, gave them access to features in beta . We also sent an avid user in the US a hat which he could wear for a conference he was to attend

      C.  Picking up and the phone and trying to resolve critical issues instead of going back and forth on emails

      D. Empathy

      E. Surprising them: Every once in a while, you should surprise your customers in whatever capacity you can think of and afford. People LOVE surprises and Love talking about them to others

      Link: http://ladynimue.wordpress.com/2012/12/01/friday-fragments/

    5. Social Media:Independently they might not mean much but together Facebook, Twitter, Linkedin, Blog, Flickr, Youtube, Quora, Foursquare, pinterest and Soundcloud can do interesting things to your startup’s brand. I vividly remember how we got our first big story on Mint thanks to twitter. You must remember that this is where people of today’s day and age spend their time. The distribution and usage patterns might change but people would still be spending their time here. Startups who are able to create brands, get this bit right.
    6. Passion:At core of every brand is Passion. Passion stems from believing in what you are doing and how useful/relevant it would be someone.  I could have included this point in the founder’s part but wanted to give it it’s dues. If the founders are super passionate about their business and somehow get their team to feel the same way it starts showing up in totally unexpected ways. Everything from how your team thinks of customers, how they build processes, how much hours they spend trying to make customers lives better, how they innovate and more comes from the magic pill called Passion. Most successful startups with brands have a bunch of passionate people showing up everyday for years with same energy and this is what translates into brands
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2 thoughts on “Why only a few start-ups are able to create brands and most fail?

  1. Chintak


    The points are direct and easy to understand on why most startups fail to become a brand. As you rightly pointed out, and also well said by Mahatma Gandhi that “Customer is always right”, customer service is what i feel the most important amongst the points you mentioned.

    You may sell the product, but to bring back the customers, how ‘you serve’ matters more than how ‘you solve’!

    Thanks for the good post 🙂

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