Branding is an activity startups can’t exercise!

“I want to create a brand”, Mr. Founder said vivaciously.

I have heard this line numerous times. In fact I have said this line many times too. Creating a Brand is dream of almost every young entrepreneur.

We are keener to build brand than the business. Many of the young guns focus on building a cool FB page and not really excited in similar fashion about modeling the supply chain. Why? Well, we confuse building business with building brand. We tend to overlook the fact that brand is just one part of overall business galaxy and not galaxy in itself.

Brand is the result of effective business practices. Anything related to brand comes much later in a startup. Initially all the focus has to be on developing the product and sell it to maximize the revenue. Branding is long term plan which takes shape only when start up is in a state where it has more or less defined its business objectives. Because during initial phase, a startup goes through a lot of changes. We all know all major online book stores are horizontal portals now. Majority of us do not recall them as book stores brands.

So, planning too much for branding activities and spending money on it is only going to put stress on your resources. When you commit resources, product development should take priority and not some PR firm.

“But building a Brand is must to get the premium”, Mr Founder reasoned.

Of course it is, nobody can debate that. Can you? But Brand is different than “Brand Name” and it is surely much bigger than the logo, packaging and advertising. It is an experience and it will evolve over a period of time.

“But I should focus on building the brand from day one and hence I need to hire a good PR company, Advertising Company. That’s why I am doing these expensive brochures”, Mr. Founder passionately explains the point.

Agreed, one needs to focus on building the brand from day one. But advertising is big drain on resources and very tactical move. It can be used to create awareness at the time of launch and other major milestones but brand building will take longer.

“So what is the cheapest and most effective way to build a brand?” Said Mr. Founder, looking confused.

One can innovate and differentiate through Product itself. If we keep our eyes open, these innovations exist all around us. I will quote an example of a small time entrepreneur. I am sure all of you must have done photocopies at the time of college projects. We all have seen big posters claiming 50 paisa each copy, some says 33 paisa and some goes to even 17 paisa/copy. I always wonder that how these photocopiers can ever make money and why they reduce the price to such a level where the business may not be making decent profit. Answer is differentiation.

In such competitive world of photocopies, one guy in my city launched city’s first color photocopy machine some years back. Now that’s the differentiation and then every year he graduated to newer technologies. So starting from humble photocopy machine he now runs a multi crore printing business and provide employment to hundreds. Instead of reducing pricing cost, he focused on differentiation. Entire city knows his name which is more than a name, it is a Brand.

It is really easy to see small time businesses around us and learn from them. At times they provide the management lessons not available in top B schools.

For example, I know two brothers who run a roadside tea stall. They always charge almost 20% more than the market price for a cup of tea. Why? The tea tastes different, with a little touch of chocolate flavor.

Have you ever seen any hoarding, brochure or TV commercial of Matchbox brand known as “Ship”? Nope, right? But “Ship” is a known brand* (Watch Deewar. The Pakistani guard recognizes Akshay Khanna as Indian post seeing the Matchbox brand)

People can build brand in such low involvement product categories like Photocopy, Tea or Matchbox without spending bombs in advertising. So, Mr. Founder, find out your differentiator.

Remember Mr. Founder, there is only one way to build a brand, which is to “sell the PRODUCT”.