The standard thought process around launching a new company typically revolves around the quality of and need for a problem-solving product. At least that’s the easiest way to look at it. This makes sense because you can’t start a business and generate revenue unless you have something to sell, and if you intend to experience wild success, that something needs to be good.
Then there is the concept of “branding,” which is not a small one -- in fact, there is an entire industry built around helping companies create and grow brand recognition. Think of it like the personality of your business -- it’s the look, the feel and the voice.
In the consumer-products industry there is clearly the need for a solid product in order to produce solid sales, but there is a tremendously greater need for a brand once you grow beyond a certain point -- unless of course you have an amazingly patentable product and gobs of money to protect it.
If you are, however, not one of those extremely fortunate few, the time will come when you're going to need to focus more heavily on your brand and its development for continued growth and a potential exit than on your product. Here are three signs that your time has come:
1. The knock-offs have arrived.
This problem is just a reality of having success in business: the copycats will come. By the time this happens, you’ve hopefully laid the framework for how your brand interacts with clients, customers and the general public so that you can scale it quickly. The fact that knock-off products have begun to appear means that you’re going to need to focus heavily to turn your brand’s name into as much of a household name as possible. If you develop your brand into something consumers desire, they will line up to pay a higher price for the original.
2. You're no longer bootstrapping.
When you start a new company, funds are limited. For at least some period of time you’re going to need to put 100 percent of the company's revenues back into iterating the product or investing in inventory. This could take months or even years. But once you achieve some amount of scale, where income is greater than the overhead required to facilitate continued growth, you’re going to need to focus some of that additional capital for brand development in the form of traditional and non-traditional public relations, or even social-media advertising that is more focused on cost per impression and less focused on cost per acquisition.
This doesn’t mean that you should have neglected the brand all along -- quite the opposite. The voice of your company should be evident and consistent in everything you do, including the website copy, email blasts and social-media posts that you’ve been producing since the beginning. You’ll just now need to pour a little gasoline on the fire to further promote your brand and gain some needed recognition.
3. Expanding into physical retail.
Part of the difficulty in pursuing physical retail early on is that consumers don’t know your product or brand. You may lose control of the product. For these reasons, I believe it’s extremely important to offer your products directly to consumer for as long as possible, controlling the customer, the product, the brand and the revenues.
But with success, there will come a time when moving wholesale product into physical retail space could make sense. You’re going to need to focus heavily on your brand to ensure that the orders keep coming. Once you’re on a store’s shelf, you need to be sure that the customers are going to take your product to the register and pay for it, because you’re not likely to get a second chance if they don’t.