Why is branding important for startups and small businesses? Why should startups invest in branding from the very beginning and have a precise plan for it? Can it be claimed that the success or failure of startups is directly related to branding?

If a small internet business that started on Instagram wants to grow and not just stay on Instagram forever, it needs branding.

If a startup wants to grow, reach profitability, and remain active; it is necessary to think about branding from the beginning and invest in it. But why? What are the compelling reasons why startup success depends on branding? In this article, this question and the questions raised at the beginning are answered.

Why is branding important for startups?

Before I tell the reasons why branding is important in the success of startups, I need to talk a little about the concept of branding. A startup either produces a new product or provides a service. A startup is formed around the implementation of an idea. It is the idea of a product or service that has a vacant place in the market and there is a demand for it. Another feature of startups and small businesses is that they try to implement that idea with little capital and human resources.

Therefore, it is natural that in the beginning most of the time and energy of startups is spent on finding the necessary human resources and designing and producing the product or service in the best way. After that, it is the turn of marketing and introducing the product to the market and customers. At that stage, startups are mostly looking for choosing and designing a name, logo, or slogan (brand) for their business and product. Because it is the brand that differentiates the business and the product from the competitors in the market.

But the important issue here is that few startups pay attention to the fact that having a brand alone is not enough. They also need branding. For startups and new businesses that are looking for growth more than anything else, branding gives all their marketing and digital marketing activities the appropriate and necessary direction to attract initial customers.

Branding is the process of giving a meaning to specific organization, company, product, or service by creating and shaping a brand in consumers’ minds.

The reasons for the importance of branding in the success of startups

Well, isn’t it better to pass sometime after the startup, brand, and product are active in the market and then start the branding process? It may seem that the answer to the proposed question should be positive. But it is not. Because according to some statistics, only 1 out of every 10 startups succeeds and stays in the market. Therefore, maybe not all startups have time to delay the start of branding.

Of course, it cannot be concluded from the words and statistics that any startup that does not start branding at the same time as starting its activity will necessarily fail. The success or failure of startups and small businesses has many reasons. On the other hand, branding is expensive and it is necessary to allocate a part of the startup’s limited marketing capital to it. Therefore, the startup must have compelling reasons for allocating that cost.

Branding has a very significant contribution to the success of startups and small businesses for the following reasons:

1. Branding is what gives identity to the startup idea and product in the market

Why did your startup and business decide to launch this product or service? What is the purpose of your business other than making money? What advantages does your product have compared to competitors? What color and slogan are your product and logo known by? What image do startup employees have of the brand?

Startups should not think that building a brand is only about designing an attractive logo and visual identity issues. Yes, what the user (customer) sees of the product is indeed very decisive in attracting him. But the startup needs loyal customers to stay in the market, not those who are attracted to the color and design only once.

In addition to the market and customers who must know the answers to those questions, each team member must also know about the startup’s identity, missions, and values. Branding answers those questions and draws a very clear picture of what and who the brand is in the mind of the audience (customer) as well as every person who works in the startup. This is the reason why everyone in the team knows what they are trying to achieve and the market understands what product was released and why.

2. Branding is what gives credibility to the startup and the product

Just creating a visual identity, visual differentiation, and brand awareness is not enough for startups. The startup and its product are completely new in the market and for the customer. Why should the audience and customer trust this new product and brand and even pay once and buy the product or spend time and use the product?

Let me give an example. Imagine you designed an application to teach English. The motto of the application (product and startup) is “Learn English like drinking water”. Your startup has invested very well in digital marketing and social media marketing, and I get to know the application on LinkedIn and Instagram and I understand that another one has been added to the language learning applications. But the important question for me is why should I leave Duolingo, with that reputation and 50 million users in the world, and trust and experience a new application?

Branding is what drives digital marketing and social media marketing in the path of brand recognition.

3. It is branding that attracts financial and human capital for startups

The startup is on its way. As mentioned, startups fail for various reasons. One of them is that the startup has not been able to get the necessary capital to continue. The startup must both sell and attract investors. Attracting investors is not an easy task. The investor must make sure that the startup product has customers and can gain the trust of the market and customers.

In addition to financial capital, startups also need expert and skilled people to grow. Attracting expert human capital is not an easy task either. A skilled workforce chooses a startup that has a future and moves in the right direction. Branding helps startups attract both types of capital. Because it presents the message, identity, and credibility of the brand correctly and completely transparently to the market as well as the target audience.

Branding puts the startup in its proper place in the market.

4. Branding is what defends the startup and the product against competitors and other startups

The startup and its idea and its presence in the market are both a threat to other startups and a kind of threat to old and famous brands. Duolingo was once a startup and gradually grew and turned into a business whose revenue in 2021 was 251 million dollars. For this reason, the startup must have a strong and calculated start and convey this message to everyone that it is here to stay.

A startup creates and manages its brand with branding. In branding, brand strategy is developed and all activities and campaigns of digital marketing and social media marketing are done based on the same strategy and delivering the same message. When a business invests in branding from the very beginning, it shows competitors that it is serious to stay in the market and take part of the customers, and they should take that business and its product seriously. Branding defends the startup, its idea, goal, product, and presence in the market.

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