How much is the most valuable brand in the world, Coca-Cola worth? $77.8B. That’s 45% of the company’s market cap.
Often times, winners create advantages in a market through brands. These brands evoke emotions within consumers: feelings of trust (Visa), of aspiration (Nike), of adventure (RedBull). And if the brand is strong enough, it replaces the generic term: tissues/Kleenex, internet search/Google, glass cleaner/Windex.
In Silicon Valley, we tend to believe that better products win markets. It’s atypical to overhear a conversation at Blue Bottle Coffee or at YCombinator about brand building - brand attributes, values, positioning. Instead, our exchanges focus more on technology and more recently, design.
But over the next several years, marketing, branding and positioning, all under-appreciated disciplines in the valley will become markedly more important. As barriers to entry continue to fall driven by cloud technologies, competition among startups will increase and the startups that reach their target customer bases with the best messaging, building the most effective brands, will win.
We know storytelling will be the differentiator. Look at every commodity industry to see the value of branding. Nike makes running shoes. Kleenex manufactures tissues. But they each sell something else - they sell an idea. Nike sells excellence: “Just Do it.” Kleenex sells “taking care of family.”
It’s logical that cash conscious startups should limit their investment to measurable marketing tactics. But as startups scale and as technologies commodify faster and faster, branding building investments should become a key part of the marketing efforts of the business.
Ultimately, the brand may become half the value of the company and the true differentiator in the market place. That’s nothing to sneeze at.
Mar 3, 2013