As soon as Seedcamp makes a new investment, it invites the startup-in-question’s founders and core team members to ‘Basecamp’ – essentially a crash course in early stage business fundamentals. Among the very first topics to be covered at these sessions is brand, Reshma Sohoni, who co-founded the seed fund told me when I interviewed her for my upcoming book, Upscale. “Along with fundraising, which will be so important to them a few months after our round … our view is that brand is always critical — and it’s critical from day one.”
As you start to shift through the gears from pre-seed to seed, through Series A, B, and beyond, the challenges for your brand evolve, Sohoni said. “So whereas an early adopter has a certain view on your brand, product, service, and your story … all of those things are starting to get challenged in terms of consistency. Is your brand being talked about in the same way? Is it eliciting the same emotional response? Are your customers’ expectations the same? Those are the sorts of issues we see with our companies.
“Those companies who are successful as they start to scale through to growth stage, have been lucky or talented – or both – in terms of always having a consistent brand story.”
TransferWise, a $1.6 billion-valued currency transfer service that was Seedcamp’s breakout investment, is a case point. Founders Kristo Käärmann and Taavet Hinrikus have a backstory that is exquisite in its simplicity and has passed into tech startup folklore. It also has virtue of being true. While one founder was continually transferring money from his Estonian bank to his London account, the other – with a mortgage back in Estonia – was doing the reverse. With both hit by sky-high bank transfer fees, the pair realized they could save a truckload of money by paying each other’s expenses instead.
“The thing about that story is that it hasn’t changed,” Sohoni said. “So I count it as lucky that they had this story and maybe their talent lay in spotting that it would play a big part in taking them through to where they are now — all the way to millions of users and a billion-plus valuation.”
For a brand story to have staying power, it needs to be authentic, Sohoni said. It can’t be bolted on retrospectively at the scaling stage.
“Hindsight is great for articulating the points of resonance for a story, but you need an authentic story of an Aribnb type or TransferWise type or indeed a Seedcamp type for it to play through across [the years].”
So what does she advise companies without sticky TransferWise-style back-stories to do to ensure their brand resonates?
“Even if you haven’t got a powerful personal story, there’s something persuasive in solving a problem of some kind – look at Slack or Dropbox – that can be emotional, or sexy even. If large numbers of people are starting to use your product or service, they are doing it for compelling reasons, and that should become the heart of your brand.
“When our startups come to us or others and ask ‘How do we create a brand out of this or create more of a brand out of this,’ we suggest they tap into the stories of why people are using their product or service.
“Take Thriva.co, a home blood-testing kit solution. The team got this incredible note the other day from somebody who had discovered they had thyroid cancer thanks to their test showing there were some inconsistencies in their results, which prompted them to go to the doctor. Through that there was an early diagnosis, when most cancers of that type are not diagnosed until it’s quite late.
“If you don’t have that personal ‘Me and my friend did x and y and so the company was born,’ then if you can pull out these sorts of success stories … you can use them to champion your brand,” she said.
As a company reaches scale-up stage, growing from its first 10 or so original employees to 100 or more, the founders often face a range of urgent issues to resolve surrounding their brand. “Somewhere on that journey to 100 employees, or whatever it is, everything around your brand breaks,” Sohoni said.
“[Your brand’s] color usage, the typography, the brand story, what your brand and product do, and so on — all of those things break at that point. What entrepreneurs especially fight against is you need much more standardization, and as an entrepreneur who hates routine and instinctively wants to fight against standardization, unfortunately it becomes so crucial.
“Again, the simpler your storyline is, the easier and less onerous standardization is as you are growing. That’s probably the biggest thing [for scale-ups].”
What’s more, your 100th employee needs to be able to tell the brand back-story (or proposition) with as much conviction as your earliest hires, she said. “If your slogan is ‘Faster, cheaper, better,’ then all your employees need to adhere to those core brand promises in everything they do.
“We recommend that all the elements of your brand – from the website or app’s color scheme to your back story and your promise to customers – fit together in a single thread that carries right across the brand in a coherent way.”
Similarly, strong brands tend to go hand in hand with company culture, she said, which is why it’s so integral to a startup’s success. “It’s a chicken and egg situation between brand and culture. If you have the right culture and the DNA in those first two, three, four people – or even that one person — who started the company, they’re always also obsessed about brand.
“Of course, that cuts both ways. For a hugely successful company like Airbnb, its distinctive and inclusive brand is plain to see in its culture too.”
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