August 1, 2022

Valuing Brand at the Early Stage

INSIGHTS
Why investing in brand delivers results for founders
Written by:

Matt Berberian

Written by:

25m Studio

When we begin working with startups, they often lack a critical asset: a brand. To help entrepreneurs develop their brands, we start by asking what they are trying to accomplish.

The answer (more often than we’d like to admit) is typically some version of “We just need to look legit” or “We’re busy building a product and haven’t thought about it.”  

With easy design templates like Canva and Pitch, off-the-shelf domains and logos, and more pressing priorities like product development, many wonder why early-stage companies should focus on brand at all.  


As if these questions weren’t enough, there are two more major challenges to building brands for startups:

The first is the agency partner challenge. Agencies have created brand development systems that will cost $100K-$300K+ (with a healthy 30-70%+ margin built in for the agency). Agencies usually provide a fixed-duration approach, which works well for established companies with existing products and audiences. However, it doesn’t work for startups with nascent products, as they need the optionality and flexibility.

The second is the “Iron Triangle” challenge: when choosing between “Good,” “Fast,” and “Cheap,” only two can be selected (e.g. Good + Fast = cannot also be Cheap). For early-stage companies, this creates a dilemma because two of the three vectors are already locked in. They must be fast and likely have very little capital to do it. In this equation, “Good” is sacrificed, and that deficiency is clearly on exhibit in the visual brand. 


These challenges cause companies real pain-points: confusing origin stories can slow down or even kill fundraising efforts.


That’s why brand MATTERS at the early stage.

This is how brand can help…

1. Brand helps you confidently tell a story 📢

At the earliest stage of a company's formation, oftentimes it’s only the founder who can clearly articulate the problem and solution that they seek to address. That hypothesis is generally unstructured, not scalable and not validated with real-life audiences.  


Through the development of a brand & experience strategy, a company can distill unstructured thoughts into a concise value proposition. A strong brand can help articulate reasons-to-believe, voice & tone, and help founders more clearly convey value to different audiences.


The brand strategy becomes the creative brief for crafting your brand identity. Ultimately, this identity is what brings your company to life, wrapping it into a consumable story in your pitch deck (see our tips for building a winning pitch).  

 

(before and after of cuely.ai website, visual identity, brand language)


2. Building brand equity supports product-market fit 🎯

A brand is not created for you - it’s created for your customers, with a purpose that resonates with them. This takes creative work, research, and real-life tests to learn and iterate on the words, visuals, and tactics to engage your target. Building brand equity is the result.  


According to Qualtrics Ultimate Guide to Brand Equity 2022, developing brand equity gives your company additional license (with our take added in bold on the right):


Additional License - Impact to the early stage

Develop greater market share - Stand out, without any prior brand recognition

Charge a premium - Validate different price points and options

Extend your product line easily - Test and learn at the early stage  

Have a greater impact - Get your first corporate partnerships

3. A good brand toolkit enables rapid production and development 🚀

Part of the brand development process is the creation of a brand guide - a toolkit of assets that your company will use to ensure consistency across every application. For new companies looking to win over prospective customers, Consistency Creates Trust. A good toolkit can improve front-end production significantly (we’ve seen 3-5X improvements in effectiveness of web, content, social assets, sales support materials, etc.).


This toolkit includes logos, typefaces, notional applications, brand language and the other components of a visual system that marketers and product designers use daily. 25madison builds these directly in Figma, with root assets and vectors, enabling rapid production (see our Figma tips for newbies).


Bonus - the brand guide serves as a "welcome to our brand" for new employees or partners - an introduction to who you are and how you act. You can onboard individuals more quickly!

(Brand Identity, Style Guides and Toolkit developed for TCARE)


4. A great brand engages prospective investors with increased success 💰

Venture capitalists invest in <1% of companies, with only 10 out of every 1,200 idea submissions being pursued. With that success rate, companies need both demonstrated product/experience and a well-articulated story to even get past the submission inbox.  

Those challenges are apparent in the sea of sameness we see every day. At best, your story looks (and feels) the same as everyone else’s. At worst, it’s confusing, unvalidated, and leaves the investor lacking confidence.

A well-defined brand and story, plus being well prepared for the pitch, will up your chances significantly.  

Why work with a startup studio on developing a brand? 🤔

1. The startup studio model is positioned to address brand challenges, with in-house competencies better suited to navigate the Iron Triangle.  

2. 25madison approaches each company differently, determining the right balance of brand investment based on the company’s objectives and stage.  

3. In each case, we work up the right plan for the prospective company, balancing cost, speed, and quality to deliver against the near-term and long-term objectives.  

  • A brand that is D2C will likely be more reliant on developing creative that engages audiences through social media.
  • A B2B brand will likely be more heavily reliant on sales support materials and product/experience demonstrations.  


Our team has experience from both agency and in-house creative backgrounds. We’ve brought these skills together to create a brand development method that is focused and incentivized on delivering results at the early stage.


Have a great idea and ready to talk about how we can build your brand? Let’s chat.  









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Building businesses is in our DNA. We’re a small but mighty team of tinkerers, designers, geeks (the cool kind), operators, business moguls and everything in between. Wildly strategic, yet so deep into it that we’ve got the scars to prove it.

Whether it's with the 25m Studio, 25madison Ventures, or 25m Health, we’re looking for great people who love their work, solving problems, and having fun. Jerks need not apply.