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  • Writer's pictureMatthew Lerner

Should startups invest in brand building?

Should a startup invest in “brand-building?” And how much? (Brand should not just be the budget line item for “things you want to do but cannot measure” - Building a brand is hard and expensive, this is an important decision.)

Of all the marketing things I see startup marketers waste money on, brand-building must be #1: it's expensive and impossible to measure.

A brand can be incredibly valuable! Patek Philippe and Birkin (Hermès) can charge $50,000 for $500 worth of materials and labor. That’s brand value!

But Amazon and WalMart have low prices and look like crap, but still rank in the top 20 “world’s most valuable brands” (#4, #19). So it is possible to build a very valuable company without “brand building.” (Consider also: Microsoft, Cisco, Oracle #3, #15, #16).

Should you spend years and a fortune to build a brand?

How do you decide?

I challenge companies to consider three factors:

1. Moats

At scale, your company will need some kind of “moat” to protect it from competitors (valuable patents like Roche and Qualcomm, low-cost provider like Walmart, network effects like Facebook and LinkedIn, or high switching costs like Spotify and Gmail). Brand can be an incredible moat, but it’s expensive and takes years to build. What moat makes sense for your business?

2. Lookalikes

Is your product or service easy to copy or replace (like a handbag)? If so, a strong brand can help you differentiate and charge a premium.

3. Emotional Space

Brands resonate with us at an emotional level - they blend trust and aspiration. You’ll get a lot more value from a strong brand if you’re in an "emotional space" category. For example, where trust is important (e.g. health, personal finance, data security) or where there are premium offerings (e.g. fashion, liquor, travel). Is there an emotional space you can play in? What’s at stake for your customers?

Brand for Everyone

Even if you decide not to invest in brand-building, there are two (inexpensive) fundamentals that every startup should establish early-on:

  1. Your brand should reflect a mission/purpose, so you need to figure that out! (And reflect it in everything you create and every customer interaction)

  2. A strong, consistent visual identity and tone of voice with clear simple documents to help everyone stay “on-brand."

How do you measure brand strength?

If you do invest in brand building, you don’t need fancy software to measure your brand strength. You'll find a much easier way in my blog post: How do you measure ‘brand building’?.

Look, this cannot be a side project. Brand building either is your strategy or it is not. Make that call early so it frees up resources to focus on other parts of the marketing mix.

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