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How Seed-Stage Startups Should Think About Brand: A Conversation With Jesse Derris

NextView
March 8, 2016 · 6  min.

Jesse Derris is the founder and CEO of Derris & Company, a PR, branding, and communications firm based in New York. His firm has worked with companies like Warby Parker, lululemon, Oscar, and more.

He and his firm are widely applauded for their work with high-growth startups, particularly those with a consumer focus.

Jesse recently sat down with NextView (I assume he was sitting anyway — we spoke on the phone) to talk seed-stage company branding, building a startup identity, and some of the most common mistakes founders make when establishing a name for their companies.

 

Jay: How should a tech entrepreneur frame “brand” as an idea in the first place?

Jesse: First and foremost, they need to commit to the idea that brand is important and recognize that product isn’t everything. It’s a lot, but it’s not everything.

In today’s world, product is necessary but not sufficient. In addition to a great product (again, which you absolutely need—whether it’s physical, platform, services, etc.), you need a keen understanding and the ability to think about what your brand is and how to communicate that brand to people.

When we work with founders, for instance, we’ll collaborate early on to uncover what the brand story is and how to articulate it.

 

What are some common, early mistakes entrepreneurs make when developing their company’s brand identity and message?

Unfortunately, too many startups come to us way too late. They tend to come when it’s time to go to market, or they’ve launched (not well) and need to grow audience or customers. My advice is simple: Go talk to someone who understands earned media (mainly press) long before you have a need for it — in many cases before you even have a fully developed product or brand.

The other thing to know right away as a founder is that there’s a subtle (but large) difference between people in advertising or visual branding and folks who understand the words that make a brand tick. The former is important, but equally important is to understand the latter and how you communicate a brand verbally.

So we like to say that firms like ours work best with a startup when its ideas aren’t fully baked, but rather they’re at the “Play-Doh” stage. They’re malleable. Otherwise, there’s often too much set in stone to enable us to do our job effectively.

 

One of the reasons a founding team may ignore the need to consciously develop their brand is speed. They might believe that branding is a fluffy idea or a later-stage need, and right now, they need to move faster, launch, learn, grow, and survive. Is that the wrong mentality?

Not necessarily, but I think different types of companies require different types of early commitment to brand. What’s important is that wherever possible, have those early conversations just to get started in thinking about your company’s brand. And try to listen to the people you’re hiring as experts.

If you’re building a product that can grow virally—a social network, for example—brand is almost certainly less important at launch than product. If the product is good, people will find it. And in that case, there’s a low barrier to entry from a cost perspective and an experience perspective. It’s easy for people to download and open something if its free and easy.

But if you’re launching a physical product or a more complex service, for instance, you likely need a more proper product launch, and that can only be achieved if you think about press from the very beginning.

 

Can you still operate in some kind of lean or scrappy way and launch a brand that resonates with the market?

You can absolutely launch lean and scrappy. There’s a do-it-yourself playbook that you can use to launch a brand. It still involves a deep focus on brand, and good tactical execution—you just do it yourself, and not with an agency or a public relations expert. It’s doable though.

 

Who owns the brand at a startup? It seems like such a foundational idea, but there must be a need to have a “buck stops here” person or team, no?

Yes, definitely, there needs to be someone who owns brand or at least a final decision-maker. Generally, a founder needs to own this for the first year or two, at the very least. Beyond that, it’s important for the person who owns brand (whether in-house or built through agency relationships) to report directly to the founder or CEO.

Can you walk through the decision-making process that you and a startup client would use to create the right brand and the right earned media strategy?

The very first step is to decide if you’re an “issue” brand, a “price” brand, or both.

An issues-based brand is just what the name implies: your brand is about owning some kind of issue, like the Honest Company, for instance. They very clearly articulate the issue they care about—being honest with consumers.

If you’re a price brand, then that’s your core competency—you offer a price benefit to the market. You sell something for less.

So you really need to think about this question up front, especially as a physical product, which is a lot of our clients. You can be either or both, but think about what you’re able to say over and over again that might be interesting to reporters and the marketplace.”

So once that’s completed, what comes next?

Second, we ask: what does iteration mean to you?

Especially with press, newness counts. They’re looking at the newest or next thing. Just because a company has been around and isn’t brand new to market doesn’t mean you can’t come up with things that the press would find cool or exciting and want to report.

There are two types of iteration, broadly speaking: product and brand.

Product iteration is about asking if there’s a market to do product placement with your brand. If you’re selling coats to women, are there editors, bloggers, influencers, and so on who would be interested each time you put out a new coat? This makes up a large percentage of the volume of press that product-oriented companies earn, in our experience.

The second, brand press, is the manifestation of the brand story you develop. How would you talk about what you’re doing differently from the rest of the marketplace? How are you disrupting something? Can you tell this in multiple ways? How does this live and breathe throughout your organization internally too? What about your supply chain? Customer experience? Fulfillment? Culture.

If you’ve thought about those two things in a meaningful way, you’re way ahead of the game.

 

Whenever consulting spend is dedicated to someone that isn’t directly building the product or acquiring customers via direct response, it’s easier to push back or question the use of funds. How should a founder think about spending on branding strategy and comms?

The answer lies in whether press and organic makes sense for the product you’re selling.

I think it’s important you do some sort of PR activation around launch across the board, because you can only launch once. And it’s important in today’s ecosystem to launch loudly.

After that, there’s this idea of iteration. If you conclude it’ll be tough to iterate your product and brand story over and over and over again, but you’re in an industry where you can acquire customers through Facebook or another platform in an efficient way, your answer is simple: pour money into paid acquisition.

On the other hand, if you’re in an industry where brand is important (which is most product-oriented brands), it makes sense to spend money on brand and PR. It adds value when it comes to customer acquisition, yes, but there are also a number of intangible benefits: hiring, partnerships, and even a higher valuation.

 

Iteration seems to be an important concept. Can you expand on whether a founder can easily identify if their branding and story will be conducive to remixing and retelling to different audiences at different times?

If you’re selling a product that changes styles, colors, features, or in a niche that has a natural subset of reporters and blogs for folks to read, that’s an opportunity for iteration.

If there’s not iteration in a natural way, say for a platform business, where the product doesn’t really change but might have some feature additions (which doesn’t change the story of it much), then it’s harder to iterate.

On one hand, the latter product might grow more virally because these products lend themselves to that. But if you go back to the early days of Uber’s press, a lot was about external, non-product things: partnerships or activations.

But unless a company has time or money or people to focus on that, you’re better off focusing on paid for those types of products.

 

How can VCs encourage more brand-led companies? Where do they tend to derail a founder’s well-intentioned and strategic approach to brand?

The most important thing VCs can do is pay attention to the idea of brand and track it when they make investment decisions. They should ask founders, “How do you think about the brand and how it’ll evolve?”

LTV, costs, and financial projections are all educated guesses, but if you ask how they think about brand, you can get some concrete information about how their mind works. So asking questions about how they think about brand evolution, or whether there’s a cohort of bloggers that could spread the early word are great places to start. That’s very tangible.

 

What are some examples of startups succeeding thanks in part to their brand-first mentality?

There’s a reason that Warby Parker succeeded, while most of the many copycats who popped up after they launched did not. Warby’s product is great, of course, but its brand is also just better.

Casper has tons of competitors, but they’re winning.

So you see lots of markets where, yes there’s competition, others get traction, and they can raise money because investors want to take a flyer—but usually the company that ends up winning isn’t always because the product is 1,000 percent better. It’s usually the one that understands brand better.

Whether we like to admit it or not, the best product does not always win.