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The Bodega Effect: Lessons In Branding From the Rise and Fall of a Startup

When you set out to disrupt the status quo, don't pick a status quo people love.

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We've all heard the old adage, there's no such thing as bad publicity. Tell that to the recently launched Bodega, a startup supplying small personal "stores" within an apartment house or business, that would offer a tech-driven, automated replacement for the ubiquitous family-owned corner stores that have become an urban icon. For an ambitious company, the sort of PR that Bodega initially received would see its founders high fiving. Instead, the backlash that has accompanied its recent launch could see the startup boycotted before it's even really begun.

Todd Boebel | Getty Images

The internet enjoys being outraged, and no matter how brilliant a product or well-positioned a brand, some people will always sneer. But for two ex-Googlers to have struck out so badly is surprising. They should know the social mores of the 'net better than most. The outrage around Bodega has been trending on Twitter for days and there's no telling when it will die down. When you've distracted the internet's ire from its favorite billionaire president, you've gone really wrong.

But, within this failure, there are lessons for every startup about branding and the need to get it right. By better understanding the challenges inherent in building a brand, startups can avoid the Bodega backlash. Their launch is a perfect example of a tone-deaf brand catapulting a perfectly reasonable and inoffensive product proposition into public enemy number one.

Related: 5 Branding Mistakes No Startup Can Afford to Make

Pick your enemy well.

When you're building a brand, it's often helpful to identify an enemy. Something that your brand is standing up against, a convention that you think could be improved or a pain point for consumers that you believe could be solved. The problem with Bodega is that it set its sights on entirely the wrong enemy.

When you boil its proposition down, it's essentially a smarter vending machine. One that uses data analytics to ensure it's stocked with the items that its most frequent users want the most. Now, if the company had decided to put vending machines on notice, to offer a healthier, better-curated alternative to machines full of rock solid granola bars and neon potato chips, the response to the brand would likely have been much more positive. A convenient cupboard stocked full of things people actually want to eat, plus a few convenient items like razors and toilet paper, would meet a clear customer need.

But, Bodega didn't choose that route or that enemy. It chose to attack a quirky, cultural institution for which people clearly have a great deal of affection, and in so doing managed to make itself the enemy instead.

The appropriation of the cat -- the beloved mascot of the bodega (see bodega cats of Instagram for many wonderful examples) -- for its logo seems like the final straw. For many, it was an almost a gleeful middle finger to the mom-and-pop institutions that the budding tech companis is trying to run out of business.

At a time when New Yorkers are getting increasingly frustrated at their streets becoming copy-and-paste clones of each other, filled with big brands that lack any connection to the community, the bodega represents one of the last entities that captures a unique sense of place, the one non-corporate corner of the neighborhood with real character.

Startups are used to tackling challenges and taking risks in disrupting the status quo. But, they should also take this branding lesson to heart. If you want to build brand affinity by pioneering a "better way," pick an adversary everyone will be happy to gang up against.

Related: 11 Disturbingly Offensive Ads That Landed Big Brands in Trouble

Do the right research.

Bodega rightfully anticipated that its appropriation of the Spanish word might face some challenges, so it did some research. As the founder explained, "We did surveys in the Latin American community to understand if they felt the name was a misappropriation of that term or had negative connotations, and 97 percent said "no.' It's a simple name and I think it works."

Normally, this would be a good example of a brand doing its part to understand its audience. Startups should always be encouraged to dig in and do their homework. But, it's important that brands do the right kind of research, not just collecting impressions that validate pre-existing biases. This is a serious danger in the startup space where product-focused teams find themselves branding in an echo chamber. The result is often a mismanaged identity, completely divorced from the realities of its audience.

In Bodega's case, I'd question how rigorous the research was to begin with. Why did it speak only to the Latin American community, rather than the communities at large that it wants to actually use the service? If the ambition is for the service to become ubiquitous, then surveying a true cross-section of students, workers and gym goers in both test cities would have been a better read on the likely response. After all, you don't have to be from a specific culture to be offended by its inappropriate appropriation.

Bodega eventually agreed, saying on its blog, "It's clear that we may not have been asking the right questions of the right people." Startups should take note. Not all research is equal valuable.

Related: Bud Light's Lighthearted 'Up for Whatever' Campaign Takes a Dark Turn

Know when and how to start over.

To wheel out another cliche, today's news is tomorrow's trash, so the Bodega founders could simply lie low and wait for the internet to turn their attention back to "The Donald." But, while the name and the logo remain, the brand might find it hard to shake the associations of appropriation that have angered so many, resulting in customers unwilling to interact even if they want that protein bar or bag of pretzels.

There is definitely a vogue for more abstract names and identities for startups, such as Kabbage and Lemonade in the fintech space. This is due largely to the difficulties of trademarking anything remotely descriptive. But, it's also fair to say this irreverence can make it harder for brands to attract opprobrium. Bodega probably would have been better off exploring this more abstract approach.

The good news is, even for brands like Bodega that do make mistakes, a full mea culpa is still a viable approach. The internet may forgive and forget over time. Then, the company can concentrate on a swift rebrand that puts another, less beloved enemy in its crosshairs.

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