This post was prompted by a question asked of my by Tomasz Tunguz of Redpoint Ventures. In one of his recent posts he made a number of excellent observations about how startups should manage their resources to the deploy the most effective marketing in the early stages of their development. However one thing caught my eye – the use of ‘Brand’ in place of ‘Awareness’ – this difference is crucial especially in tech. My response prompted a question from Tomasz:

@Ronin_Jim that's a really important distinction. What are the best ways you have seen to engender preference?

— Tomasz Tunguz (@ttunguz) May 6, 2014

To answer Tomasz’s question about preference, it’s probably worth getting a handle on the basics.

What is a Brand?

First thing’s first, terminology is very important – in the context of marketing, Brand and Branding are different. As any marketing textbook will tell you there are a number of origins for Branding – shop signs that could be understood despite low literacy rates is a common one – Branding is what you do as a company to help people identify you. Aspects of Branding will include name, logos, corporate colours, packaging – essentially the “artefacts” of your overall Brand. Your Brand however is wider than this. An analogy I like to think of the practice of applying a brand to livestock. The reason I like this is analogy is that it is instructive as to concept of what your Brand really is – cows don’t brand themselves, they are branded by their owners. So it is with companies – we don’t brand ourselves, for the most part our ‘owners’ (users, customers, shareholders, the general public etc) do it for us. Your Brand therefore is the collective knowledge and experiences that others have of your company, its people and its products.

As you can imagine this is different from Awareness, which simply tells you that people know you exist.

Why Does Brand Preference Matter?

In an ideal world (for you) your company would have a market monopoly. Customer preference would be irrelevant. Certainly markets where network effects are prevalent feature companies with a near monopoly – think Google Adwords. But a true monopoly is quite rare, and so brand preference comes into play – and it is a strange and powerful thing because sometimes it makes no sense at all.

Why do most people prefer Apple over Samsung? Samsung has for some years now had a superior feature list and whilst not quite on par, its design is improving too. Yet ask an Apple fan and they’ll laugh at the suggestion of switching… even if the devices were the same. Apple has invested considerable amounts of time, effort and money into building its brand to the point where people identify with it almost regardless of its products. People have developed a strong Brand preference that goes beyond rational explanation.

It works in other places too – much has been made of the meteoric rise of SnapChat. For all the talk of rational benefits to kids of its empheral disappearing photos, much of the reason SnapChat became cool was because it wasn’t Facebook. The SnapChat Brand became synonymous in the minds of customers and non-customers alike of something fun, secret, rebellious and just a bit devious – ie. catnip for kids. When Facebook offered on SnapChat they realised this – as much as they talked about user metrics, the subtext was about harnessing (or defanging) the growing power of SnapChat’s Brand.

How Does This Impact Startups?

Having read the previous paragraphs it may feel like you have no control over your Brand; you may also feel that without any marketing budget there’s little you can do about it anyway. But being a startup is one of the few occasions when you start with a completely clean slate, and given that your Brand is the collective experience that others have with our company, every interaction matters. The upshot is that you have more ability to influence your Brand as a startup than at any other time, and it costs you almost nothing to build.

Where to Start?

So where to start? Firstly, think carefully as you develop your Branding as these are the first artefacts people can attach themselves to – logos, company name etc. There is a temptation to skimp here and find a generic logo online or pick a dull but functional name. Don’t. If your company becomes wildly successful, you’ll spend a lot more money further down the line correcting things. Call in favours, beg, wash dishes, anything to get something you can be proud of.

Brand Values

Large companies spend a significant amount of time contemplating their Brand values and culture – the values and assumptions of the company that are represented internally and externally. As a startup this should take much less time because you’re only a handful of people and the link between culture, values and brand is much more distinct. Start with you and your cofounders – for startups, Brand has to be an outgrowth of your company culture and values. This is vital as all your interactions with customers, users, the media and others need to be consistently ‘you’, if you’re trying to be something you’re not it will eventually show. Get it right however and it becomes a touchstone you can call upon for decades. Many people cite Apple’s “Think Different” ad campaign as one of the greatest brand ads of all time. It’s hard to argue with that. But the reason it was so powerful was that it drew upon a culture and identity of Apple that stretched back to its founding. As a startup, that is your opportunity.

Once you’ve been able to define your Brand values, customers and users can compare your values to theirs.

Linking Back to Preference

A lot of this may seem incredibly imprecise and “soft” in the predominantly left-brained world of tech, and indeed it is – you’re trying to influence your audience at a near-subconscious level. But get it right, and your audience will prefer your brand at a subconscious level, they’ll probably end up finding rational reasons for preferring your company too. Whilst every business desires a market monopoly, few ever succeed. But by building Brand preference in parallel to all the other practical aspects that Tomasz suggests, you not only gain an advantage in a straight out fight, you build a resilience that protects your market position longer term.