• ProductNation Network

    Creating a company brand — outside a product brand

    One of the top two responsibilities of the CEO is to ensure that there is sufficient cash in the bank at all times. That often requires raising money from investors; an unpleasant task for most people! This article discusses a mindset change that is useful for fund raising.

    The company by itself is a product that is best sold gradually and continuously to the investors — both public and private.

    When we buy any product — say a mobile phone — we do so either because someone told us to or because our research led us to it. Even when we research a product, our view gets influenced by what we have heard about it. In the world of consumer goods, this is the power of the Brand. Raising money also relies a great deal on how the company is “perceived.” This perception is the company’s brand. The first round of money is largely driven by this brand perception. A lot of other aspects of the company (including fund raising in subsequent rounds) are affected by brand, as we will discuss in this article.

    A company has two types of brands that coexist — the brand of the company and the brand of its product(s). Frequently the company’s brand gets forgotten or confused with that of the product. Yet, the company brand is omnipresent; created by the team, vision, past success, market opportunity, etc. For e.g. Nandan Nilekani’s next startup will have an immediate brand because of the team — well before the product has even been identified. As mentioned before, the first round is primarily driven by the company brand because there is nothing else.

    The importance of company brand to fund raising often diminishes with time because delivered financial and operating metrics become the criterion for evaluating the company. When customers start using its product, the company’s brand gets pushed even further back because the overwhelming brand is that of its product. However this neglect is a wasted opportunity. In most companies there is no explicit recognition of the company’s brand and it has no identified owner. Given the criticality of the company brand for raising money, it’s imperative for the CEO to build that brand. CEOs who are very skilled at raising funds realize that they need to maintain the company brand in addition to the product brand. Consider for e.g. PayTM where Vijay has successfully navigated in and out of many businesses, while keeping the company brand associated with the promise of the future. Another example of the company brand being a driver is Theranos, the Palo Alto based Health Tech Company; of course the Theranos story did not end well because their brand was not backed by execution. However just that brand alone enabled Theranos to raise a fortune.

    The Company Brand is not built in a day

    Company brand building happens well in advance of fund raising and ideally never stops; the intensity just varies with time and circumstances. There are many ways to build the company brand in the early years of a company’s life.

    • 1–1 engagement with investors to cultivate familiarity: set up periodic meetings with relevant investors to keep them updated, get their views, and build a relationship. These same people will talk about your company in forums and eventually people buy from people.
    • PR — press appearances are noticed by investors (and by prospective employees, and customers). Its often hard to stay in the press for the right reasons so this has to be dealt with conservatively.
    • Presence in forums — establish the position of a thought leader, be seen by peers in the correct context. These same peers will be used as references by future investors. So speak at events like the NASSCOM product forum or TIE.
    • Key influencers in many areas; they can be cultivated as references or engaged as advisors
    • Customer proxies — for e.g. head of HR of INFY if the product is to be sold to HR
    • Product experts — for e.g. an advisor from Apple for a company that banks on usability
    • Go-to-market experts — for e.g. someone from the sales team at Workday, for a SaaS company

    A good company brand offers benefits that go beyond fund raising. It drives recruitment and retention (e.g. “best place to work”). It drives sales because customers often buy the company before they buy the product (e.g. the proverbial purchase from IBM). It drives policy/public acceptability (e.g. Google/Infosys wanting to be seen as doing good.)

    Company brand building therefore needs to be owned explicitly — often by the CEO — and catered to as one of the critical outbound agenda items. By investing in the company brand from day one, the company’s odds of successful fund raising go up substantially.

    Guest Post by Ashish Gupta, Helion Venture Capital

    Time to decode the ‘Social’ in ‘Social Commerce’
    Capability -> Functionality -> Usability

    Tags: ,

    May, 22
    2017
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