Small Time Brands Go Big, if They Survive Long Enough

A branding article in the Harvard Business Review caught my eye: "How These Small-Time Brands Made It Big", as I try to keep apprised of the psychology of branding and product acceptance. The article is a good refresher on some branding fundamentals, but also glosses over some core dependencies. If, as a reader, you can internalize the take-aways and understand the key prerequisites, I recommend you engage with the article.

The fundamental take-aways in the article:

• Focus on a small idea
• Deploy a powerful visual
• Treat the name as a strategic creative decision
• Don't overwhelm customers

Those take-aways are indeed valuable, but often get lost or misrepresented when applied. In nearly all of the examples provided, the author correctly mentions, but almost glosses over the struggles and hard times the companies endured before the brand really mattered. Yes, the brand was important, but the brand is/was an accelerator, not the core value. In each example, the brand didn't make the company, the company developed a great product or service before people cared about the brand.

Here's how to put things in perspective:

• Nike: A shoe company under a different name for 14 years before it became Nike, and even then, the logo was rushed out to make production deadline and cost $35. 
• Instagram: The now-famous service is a rebranding and outgrowth of the less popular Burbn
• Twitter: Tweaked a $15 stock photo that came to signify the brand

One take-away that you shouldn't miss, is that the entrepreneurs behind the brands in the examples built the business and customer base first. Once customers love or simply believe in your product or service, you've proven yourself brand worthy, which is where the value of your brand comes from. 

Build value first, and the brand value will come.

What kind of innovator are you?

In Silicon Valley, I hear the “innovation” term tossed around left and right, almost as if being innovative was the key to success or a cure for common pickup line. In my mind, innovation has a more definitive and structured meaning that has developed from brinigng new products to market, striking business deals, and crafting patents.

For structural purposes, crafting patents has probably been the most helpful in formulating what innovation means to me and how I explain it. When crafting patents, there are a number of ‘tests’ I try to apply when determining if something is patentable:

• Is it new?
• Is it unique?
• Does it solve a problem?

The 4th test - can it be created by someone normally skilled in the art, is less important for this discussion. Also, to avoid the flame wars around the value of patents, this is not a discussion about patents, but my view on how patent development can provide a potential framework for looking at innovation.

Unfortunately, much of the innovation I hear about fills only #1 and #2 above. Too often, someone will claim a product or service is an innovation because it’s new or different. Yes, a product that auto-tunes any speech to a Rick Astley song might be innovative, but does it really matter? Similarly, a toaster that burns images of religious figures on bread could be called an innovation, but really, is it worth bragging about? These are indeed product innovations, but more for fun.

How would the above compare to a system that tracks eye focus and viewable angle of advertisements in online-games to create an awareness and exposure index for advertising value optimization? How about a contract term where non-payment for 30 days automatically triggers a system audit and daily compounding increased licensing fees until partial payment of >50% of past balances is made and cleared by the bank? These service and contract innovations have a distinct business undertone.

The first two wacky ideas above (one of which I know exists) are indeed innovative, but may not provide lasting or long term value. The next two examples are much more narrow and esoteric, but have implications for long-term advertising and/or licensing structures. This subtlety leads to my main point here - innovation as a term is widely used and abused and lacks distinct meaning.

So while I do think that auto-tuning to Rick Astley is a type of fun and cool innovation, I prefer the longer-term economic value of innovation of the advertising awareness and exposure index. Neither is right or wrong, both are innovations, but be mindful of the mindset of the listener when you discuss innovation. If you and your reader have different definitions of innovation, you could be speaking entirely different languages.

Disclaimer: The “advertising awareness and exposure index” comes from a patent I drafted that was abandoned in 2002 when resource was not available to put the invention into practice. Yes, I know, I kick myself with 20/20 hindsight that it might have been valuable.

Be a sustainability business shark

Sharks have thrived for eons, and not by waiting it out.
Is your business still moving, or waiting for more target-rich times?
Many firms are hanging on in survival mode, but need a more sustainable focus to thrive.

Witness the growing number of government-owned companies, and those successful mainly via acquisitions - it seems harder to make a sustainable business these days. What sustains a business, really? Customers, of course. So could too much internal business focus actually be a problem?

At large and small businesses alike, I experienced the daily draw to focus internally - after all, these are the people in front of you every day. It's easier to deal with what is in front of you. Easier positive feedback loop too. There's something to be said for a tight organization, esprit de corps and all, but in this economy, with every customer watching their spend, lack of customer focus could be the critical factor in whether your company is on the way up or down. And that could make for some uncomfortable internal meetings. Like layoffs. Which, by the way, are easily quantifiable ‘benefits’ to the organization (at least in the very short term).

But consider some longer term business sustainability thinking.
How about words like value creation, unique value proposition, and customer satisfaction? Would things work better for business if those terms were more commonly used today? If all hands focus on cost-cutting, or on the internals of the ship, who's left to ensure it serves its intended purpose, taking customers where they need to go, and encouraging them to book another trip?

Customers aren’t interested in our ship, just in where it can take them. And cost-cutting invariably springs leaks.

Given economic recoveries last much longer than recessions, now is the time to soak up all the mindshare, marketshare, and wallet-share of weaker, less-focused companies. And enjoy a the longer ride up.
Why just survive, when you can thrive?

Next post will take a look at using this recession to work out the fundamentals and getting your business model right to provide security and profits for the long-term: Still on a cost-cutting diet, or finding fresh meat?