Startups: A Billion-Dollar Brand Question
A company’s brand is where its promise meets delivery.
In recent years, we’ve witnessed the emergence of a number of high-growth companies with valuations of more than $1 billion. These companies all originated from the desire to not only revolutionize their industries by reducing friction and innovating on customer experience, but also by making their names synonymous with what a strong brand can and should be.
A company’s brand is where its promise meets delivery. Organizations like Uber, Warby Parker, Facebook, Twitter, Snapchat, Slack, and many others have all staked their reputations on being brands . It allows these companies to imbue every customer interaction with that specific quality that makes it instantly recognizable and builds a tangible aura around them. But what should brands like these and others on the precipice of a billion-dollar valuation do to preserve and grow the brand they’ve already built?
Businesses at billion-dollar-plus valuations face the question: How do we go from being the challenger to being the incumbent?
Brand intelligence is the intimate understanding of the key factors that make your company the preferred choice in the marketplace and how to sustain that position. Analyzing the competitive landscape and positioning yourself accordingly is a component of any business strategy, but re-evaluation amidst a cadre of emerging competitors is a new experience for many companies that were once the only game in town.
So what are the factors that go into building brand intelligence?
• Align brand strategy with your business strategy: How is your brand going to help the business grow? Brand strategy serves to reinforce the objectives of the business strategy and illustrates new ways to create efficiencies, generate synergies, and connect to broader audiences, both internally and externally.
• Do your research: Brand intelligence is built on a solid fact base—the drivers of preference and the brand and market equities. Using the right research tools through a branding lens, you can determine the subconscious factors that drive consumer choice: how people really perceive your brand and your competitors, what factors influence their choices between them, and the impact of changing specific brand assets and strategies based on this data.
Uber, now valued north of $70 billion, has continually expanded on its original mission and value proposition by identifying further problems that its core service can solve. But there’s a direct through-line in Uber’s brand name. Originally “UberCab,” the company eventually dropped the “cab” as a way of opening up the brand to endless possibilities of sub-services that attest to that “ultimate” brand name. Now it has a name flexible enough to allow the company to create offerings around food and goods delivery, private transportation in jets, helicopters, boats, and more. With new sub-services such as UberPool, UberCargo, UberRush, and UberEATS, Uber has harnessed brand intelligence to create a pathway to continuously debut newer and more competitive services across industry verticals.
Brands approaching an IPO will need a story to bring with them to market, a story that articulates a purpose and resonates with customers, financiers, and the market. A company must tell a story that illustrates a vision of its future trajectory, but it must be able to live up to that story.
What are the key considerations for building your brand story?
- Be distinct: Aim for a balance and blend of clarity and surprise with a bold sense of purpose.
- Consider your audiences: Your brand purpose should translate to whomever you are telling your story to: customers, board members, and investors, or someone who has no knowledge of your business. Your story is how you tell what your business is and does and why you do it. It needs to be both flexible and simple, while communicating everything your brand stands for.
- Create it for scale: Growth means more employees delivering your brand experience across more touch points. The brand story, and ultimately that brand purpose and promise, must be internalized by all employees so they can all deliver on it.
E-commerce brand Zappos, founded in 1999, was originally all about shoes. But as it grew, becoming renowned for its fanatical dedication to customer service, its inherent story changed. CEO Tony Hsieh put customer service at the center of everything Zappos said and did and crafted a story and experience that stretched from the C-suite all the way to Wall Street, touching every employee and vendor along the way. By the time of its acquisition by Amazon, the Zappos story was not only valuable to the purchaser, but also to the market to the tune of $1.2 billion. The company harnessed a powerful brand story, and with it, continued to deliver a standout customer experience.
There are naturally two standard paths for high valuation brands: go public or be acquired. Those in the former category need to have a roadmap for adding new products and services. Companies whose exit strategy is acquisition will be evaluated for their viability to fit into a larger brand ecosystem. In either scenario, creating sound brand architecture—the way a company’s products and services are related to each other—enables a company to become an attractive market proposition.
The best brand architecture reinforces and protects brand value, promotes efficiencies, builds cross-organizational cohesion and readiness, and gives a rational framework for brand-led decision-making, from product and service naming and visual identity choices to portfolio structuring.
Some considerations to make when evaluating and reorganizing your brand architecture:
Know the value of your services as they relate to each other: As your company grows and adds additional services and products, address the question: “What are the relationships between my business units, and how is that driving value?” These products, services, and business units exist as subsidiaries of the master brand. As a billion-dollar startup, it is most important to know the value of your different units, including the preference drivers; what makes the value proposition unique for each unit; how will you add new products and services to the portfolio; and whether sub-brands draw strength from association with the master brand or other sub-brands.
Create strong names: Naming is the first word in your brand story and it can be the primary way you organize your respective businesses, services, and products. What you name your products, bundles, services, and sub-brands is critical to the portfolio. Strategic naming is key to creating a clear, concise connection across a portfolio and across your brand.
Amazon has proven its powerful brand architecture in the way it addresses managed Web services, cloud, and even on-demand media. Under Amazon’s Prime banner, it has been able to create an even more diverse and nimble tiered service that connects Amazon directly to the center of gravity in the tech world. In stretching its core-competency by this naming schema, Amazon’s architecture looks all the more impressive, not only lending value and credence to its other services, but also allowing the company to capitalize in multiple markets and categories at once.
A clear brand architecture not only helps consumers and investors better understand the value of your brand as a whole, but it also gives you a powerful framework for future growth.
Before You Cash Out
The primary lesson that any brand approaching that billion-dollar precipice can learn is this: A brand must be a constantly evolving asset for a business. It is not just a logo and it is not just a new tagline. Brand is something that constantly needs to be re-evaluated as companies grow and mature. By using brand as a lever for decision-making across an organization, a company stands to set up realistic and compelling growth goals, authoring its own future, and making that billion into billions .