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The Startup Brand Fallacy: Why Brand Marketing is Mostly Useless for Consumer Startups
Brand marketing isn’t very useful for consumer startups. Startups develop a significant brand by thriving, finding the right market fit, and scaling effectively. However, brand marketing itself isn’t the key driver of success. It’s essential not to confuse correlation with causation.
This might sound surprising because many consultants, agencies, and other intermediaries push hard for spending on activities that don’t really deliver a return on investment. Early-stage startups should avoid these traps.
Confusing correlation and causation is easy: you might see successful, well-established companies with excellent media coverage, major conference speaking slots, and celebrity endorsements, and think their great brand is what caused their success. But, in reality, a strong brand is a byproduct of success. The excitement around a brand is created by hard work in finding product/market fit, building a capable core team, and discovering scalable acquisition channels. Brand marketing is valuable but should come later.
Look at recent top consumer products; they spent years in relative obscurity. Companies like Uber, Airbnb, and Instagram didn’t achieve overnight success. They went through years of effort and multiple adjustments. Press mentions and conferences can boost traffic initially, but they aren’t enough for long-term growth.
For those who’ve been featured on major platforms like TechCrunch, AngelList, Hacker News, or even in the NYTimes, it’s known that this provides a temporary high in visibility but doesn’t significantly boost long-term customer acquisition. While beneficial in the early stages, much more is needed to scale successfully.
From a metrics-driven perspective, engagement in any product can be broken down into user cohorts joining and fading over time. Brand marketing does little to help these cohorts. If brand marketing created lasting buzz and word-of-mouth effects, then why do brand-dominated companies still rely heavily on paid marketing? If branding made acquisition cheaper, why does paid acquisition become less efficient over time, even as the company gains fame? These questions apply to re-engagement efforts as well.
It’s true that a strong brand can offer some protection in a crowded market, but it’s fragile, challenging to establish, and maintain, making it unreliable in the early stages of a startup.
Brand marketing does play a role in areas like recruiting a strong team, raising funds, and forming partnerships. These involve small, targeted audiences where a personal touch can be effective. Hence, early-stage startups should focus on these areas.
For consumer startups, concentrating on the basics is crucial. Understand your users, deliver a fantastic product that can grow organically, build barriers to competition, and monetize in a way that aligns with users’ interests. Grow your team and work with the best advisors and investors. Focus on these fundamentals.
By doing this, your product’s brand will naturally develop, and then you can enhance it further with brand marketing efforts to amplify its impact. Just ensure you get the order right!