Building a brand from scratch: Marketing’s role in startups

If there’s one thing this world isn’t short of, it’s ideas. But turning those ideas into a meaningful proposition that people buy into isn’t always so simple, so startups could benefit from introducing a marketing strategy earlier in the launch process.

Somewhere, right now, an idea that could change the world is being born. There are hundreds of thousands of them floating around; some will hatch, others will fall from the nest and land with a thud. Some have already spread their wings.

But each begins with one common goal: to disrupt their market and become a name that people recognise all over the world.

Compared with the likes of Coca-Cola, Procter & Gamble and Nike, these baby brands are barely out of the womb, and they face a long and bumpy road ahead of them in the race to be more than just another startup that disappears into the marketing ether.

The big question is, in a world overwhelmed with ideas, propositions and things, what role should marketing play when it comes to building a brand from scratch? When launching a new venture, budgets can be tight and the founders’ focus is usually on developing a product a building a customer base as quickly as possible, any way they can. The brand is often retrofitted later with the help of new funding and the subsequent ability to hire marketing expertise.

But would new businesses have a better shot of surviving – and thriving – if they embedded marketing strategy from the beginning?

What3Words, a global geocoding system that uses a unique combination of three words to identify a three by three metre square anywhere on the planet, made it a priority to bake marketing into the business from the very start.

“Startups often neglect their brand and the importance of the brand and how to build it,” says chief marketing officer Giles Rhys Jones, who spent a decade at Ogilvy before joining the business in 2014, a year after it launched.

“We chose very early on to focus on the brand: what it looked like, what it felt like, what we stood for as a business.”

When Rhys Jones joined, there was no marketing team. He did all of the social media, ads, scripting of films, and planning and buying of media, while design and video content was outsourced.

Now, almost a third of What3Words’ current team are marketing-focused and the majority of marketing activity is done in-house. As the business has grown, it has outsourced less and less – although it brings in specialist consultants, editors and designers when needed.

“It became apparent fairly quickly that to move at the speed you need to move as a startup, and to change direction [when needed], it made sense to build a team in-house,” Rhys Jones explains.

“Having ownership and understanding of the proposition and target audience and being able to explain it in the right way [were really important].”

Online credit check service ClearScore also began with marketing at its core. Anna Kilmurray joined the business as CMO in 2015 and was tasked with launching the beta version of the service before rolling it out. Within six months, the UK fintech business had acquired 500,000 customers. Now, three years on, it has seven million users worldwide.

Marketing has a critical role to play in scaling from day one, yet too often startups treat it as an afterthought.

Justin Basini, ClearScore

ClearScore’s CEO and co-founder, Justin Basini, says marketing has been key to the business’s success and growth from the start.

“We boldly launched the brand on TV from day one, which was a huge risk, but it paid off,” he explains. “It helped us attract users at a meteoric rate, and played a key role in shaping our brand, helping us test messages and adapt fast to offer users the best possible experience.

“In my view, marketing has a critical role to play in scaling from day one, yet too often startups treat it as an afterthought or underestimate quite how much exceptional marketing costs.”

READ MORE: ‘Ripping up the marketing rule book won’t save brands from disruption’

Fuelling customer acquisition

Meanwhile, Sherpa – an AI-driven personal insurance brand founded in 2016 – has hired a CMO a year before it plans to launch its service in the market. Confident in its product and with $2.3m (£1.8m) worth of funding in its pocket, the business already had a strong start; but it knew it was going to have to do much more if it was really going to disrupt the not-so-sexy world of insurance.

Sherpa says people would rather have root canal surgery than deal with their personal insurance, so it brought in Patrick Muir, who has 20 years of marketing experience having worked at brands including Egg, Morgan Stanley and Citigroup, to try to make Sherpa more desirable than a dreaded trip to the dentist.

Having turned Citibank around following the financial crisis, Muir has experienced first-hand the role marketing plays in fuelling customer acquisition, especially in an industry like financial services where the brand is built on two simple things: the product and customers.

“If you read the old books on marketing, marketing is a complete approach to business: who the target audience is, how you build the product for them, how you get the pricing right. In the end the promotion of your business should be an articulation of all of those things,” Muir explains.

“It’s how we go from being just a product to becoming a brand that actually has some value in the world. The context by which somebody becomes your customer is the biggest determinant of their future behaviour as a customer, therefore targeting people all the way through with the right proposition, the right messaging and the right targeting is really important.”

Ben Little, founder and director of Fearlessly Frank, an innovation consultancy which has a stake in Sherpa, says the most successful startups now have four things in equal balance: economic value, cultural value, social value and symbolic value.

The brand building job now is far more holistic and therefore more challenging.

Arnd Mueller, Lilium

“You can’t just focus on product,” Little says. “When you think of [a brand as a customer], you think of your complete holistic view of that business; how you feel about them emotionally, what they deliver for you in your life, the stories, the journeys they’re on, how innovative and different they are. Marketing is fundamental to establishing any properly successful business or product.”

But while some businesses have embedded marketing from the get-go, others have chosen to grow organically and only hired someone to head up marketing once the business is established – or in some cases not at all, instead relying on word of mouth.

Flip-flop brand Gandys, for example, has built a profitable business since being launched by Rob and Paul Forkan six years ago. But unlike What3Words, ClearScore and Sherpa, Gandys doesn’t have a dedicated marketing team and hasn’t spent a single penny on advertising. Instead, it invests all profits into building children’s homes in memory of the founders’ parents, who were killed in the Boxing Day tsunami in Sri Lanka in 2004.

Gandys made its first sale on Facebook to a friend of a friend in 2012. Through organic likes and shares, Facebook went on to become the brand’s primary marketing channel, with Instagram, Google ads and word of mouth also playing a key role.

READ MORE: How Gandys has built a brand without advertising

For Gandys, the traditional role of a marketing department has been replaced by online, customer and social teams, an increasingly efficient and cost-effective approach for young businesses with small budgets to gain some clout.

These teams are responsible for writing “good and shareable” content for the website and social media. Once that goes online, Gandys relies on its followers do the work.

But just because it is not marketing in the traditional sense, and there is no one in a specific marketing role at the business, doesn’t mean it’s not marketing. And while the two are often talked about interchangeably, marketing and effective communication can obviously be done without brand advertising.

It’s a similar story for Dutch eyewear brand Ace & Tate, which since launching five years ago has done little traditional marketing and no major advertising due to a limited budget and not having the right skills in-house.

Despite initially investing heavily in performance media and social, handled by a small in-house creative team, the brand wasn’t achieving the scale and awareness it was after, so this year it decided to launch its first big brand campaign to show it was ready to grow up.

“In this startup to scale-up model, it’s what you grow into [that matters]; it’s a different sort of investment and it shows a sense of maturity,” explains Kristofer Crockett, head of brand and marketing. “We’re hoping it will help to humanise the brand and product too.”

Air travel startup Lilium, meanwhile, has the job of bringing to life a service that may seem like the stuff of science fiction. It believes it can revolutionise the way people move in and around cities with the world’s first electric jet with vertical take-off and landing capabilities.

“We operate in a very competitive environment with many companies that are in a race to become the leaders in this market, which is something we need to be aware of and react to,” explains Arnd Mueller, the man tasked with turning Lilium into a consumer proposition.

Right now, a high-speed, low-cost, zero-emissions jet that can whizz around cities feels exciting and futuristic. But in a year’s time, it could be old news, which is why the three-year-old business hired Mueller as its first vice-president of marketing earlier this year.

It is now looking to ramp up marketing activity as it begins its quest to go from innovative product to global brand that people can trust, promising commuters travel that is five times faster than a car for the same price as a taxi.

“The obvious change [in marketing today] is the challenge of getting attention for a message in a world of informational overflow that is incredibly fragmented and complex,” says Mueller. “The brand-building job now is far more holistic and therefore more challenging, but it really helps when you have a truly relevant message.”

Marketing is a key driver of growth [for startups].

Lamya Hachicho, City Pantry

Food delivery service City Pantry made a similar move this year. Having raised £4m in funding and with its sights set on UK expansion, Lamya Hachicho was brought in as head of marketing with an almost entirely blank slate.

While there had been a few people doing a bit of marketing before she joined, Hachicho’s initial task was to write a strategy and structure the team around it, with a remit to raise awareness, strengthen City Pantry’s position in the market and ensure it went beyond a purely transactional relationship with its customers.

READ MORE: How Ace & Tate is looking to disrupt the eyewear market

“The reason startups have to work so quickly is because the market changes quickly and they have to be first to market. The challenge for me is how we manage to do that as we scale up, keep staff, grow and develop people and keep a great culture. Having that long-term plan and sense of direction really helps,” Hachicho explains.

“At this startup, [marketing is] seen as a really key growth enabler, so the step change we achieve in marketing will result in a step change for the business. I know marketing is at the heart of a lot of that and a lot of businesses but sometimes marketing in established companies is about keeping things going. Whereas here it is a key driving function for growth.”

The big challenge for startups is that, without a well-defined brand proposition, they only keep their startup status and point of difference for as long as it takes for a new kid to step onto the block – younger, more agile, full of eager promises to change the world with whatever they have to offer.

It’s a cut-throat world, meaning hopeful businesses need to become more than the product or service that they sell if they are to survive long-term and generate the iconic status that every brand dreams of, no matter how innovative or groundbreaking they may seem at launch.

Whether in its traditional form or via newer, less conventional methods of communication, marketing gives direction, meaning and structure to business plans and is a key driver of growth. It raises awareness, builds reputation, speaks to people and helps to create a point of difference. 

A startup’s first marketing efforts represent the moment at which it begins to connect and communicate with the outside world, which is also when people start taking notice. And the sooner people start taking notice, the better the chance of the business taking off before its competitors do.

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Comments
  • Alex Fassam 20 Nov 2018 at 9:40 am

    I really enjoyed reading this. One comment regarding the copywriting aspect of marketing start-ups. For any successful start-up to position themselves clearly in the market, it is important to identify what makes their brand unique. By having this point of difference, it can be communicated to any writers in the brand, so that any copy produced as marketing collateral is kept in line with the unique selling point of the brand. This really helps copywriters to craft copy that is speaking in the way the brand positions itself, so that everything is seamlessly on-brand.

    Brands that use the same jargon as everyone else are really just saying ” We are just like everybody else”. Brands that speak in a clear, unique, and engaging way are far more likely to accumulate a loyal customer base.

  • Romario Eichlig 20 Nov 2018 at 1:00 pm

    There’s no marketing website this good. You guys rule!

  • Andy Halmay 24 Nov 2018 at 2:44 am

    In my view, anyone planning to develop a product is mad if they do not concurrently give serious consideration to detailed marketing/promotion at the outset. I recall a vacation property real estate developer after investing millions in island lands in the Turks & Caicos Islands asking me how I would go about selling the developed land. He was an engineer and new to his game. If he had planned what his marketing would be, he would have made a different investment. Of course, he lost much of his investment.

    In the early 60s I was appointed VP Creative in Lestoil’s house agency which provided a opportunity normal creative people would never get – access to the client’s development people. They planned a new formula and look for Lestoil to be called “Sparkle Scent Lestoil” an antidote to the “garage image” of the original formula which combined petroleum distillates with detergents, could practically function as a paint remover, and produced a strong odor.

    Because of Lestoil’s phenomenal success, P&G quickly developed and introduced Mr. Clean as direct competition. Mr. Clean, with an all detergent formula, had half the cleaning strength of Lestoil but research showed that women thought it was as powerful as Lestoil. Our people planned a similar formula with an appealing scent.

    I asked for an introduction to Dr. Stoltz, the head of their lab and we had a good session during which I pointed out what direction I planned in the advertising which was to give the impression that it was basically the same product but with a more appealing scent. Adding Lanolin, which he planned, could give the public the impression the product was weaker than Mr. Clean. It could work counter-productively for us. He said he wanted to sleep on it.

    A week later during a visit to their plant and offices with my agency president, Mr. Sackel, Dr. Stoltz popped out of his office when he saw us in the hall and said to Sackel, “Andy convinced me to drop the Lanolin.” I could have kissed him. In the world that separates ad agency creative folks from the product development people of major advertisers, this sort of collaborative communication can never happen – which gives the little guys an advantage.

    Independent film producers share a common problem; insufficient funds for promotion. The majors invest 10% and sometimes 20% of monstrous budgets in promotion – amounts far greater than total budgets of most independent or art house films – one of the reasons most independent films lose money. At this very moment, through my Veni Vici Entertainment Inc., I am developing powerful promotion elements into the original stories of upcoming films that have the potential of developing promotional values higher than the budgets of these films. Marketing plans need to be built into the original products themselves.

  • Pete Austin from Fresh Relevance 27 Nov 2018 at 10:11 am

    Google “startup runway”. If you’re going to do serious marketing from day one, be aware that this reduces your timescale to get serious sales. This tactic is only viable for brands that need basically zero development. The rest of us need to calculate when we will have something to sell, and how much capital remains, if any, then plan the marketing to suit.

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