Why startup comparisons are counterproductive.

Guest blogger, Chris Grindem of The Utmost Group talks about why it may not make sense for startups to compare themselves to a "name brand."

Recently, I had an “Aha” moment regarding startups and how they like to position themselves. Specifically by saying they want to be the (name of supposedly recognized brand) of their product/service category. I don’t want to potentially offend anyone, so I won’t elaborate with specific examples.

Here’s why I think these brand comparisons happens, why they’re a self-defeating behavior and why I believe it’s more evidence that startups need professional branding and marketing help as early in their existence as possible.

Entrepreneurs and startups spend a lot of time and energy focused on money and with money people. They rightfully have to, raising ongoing rounds to finance each phase of their growth: seed, early stage, formative stage, later stage and a host of other points along the way.

In this environment, it’s not surprising entrepreneurs pick up the language of the investment community.  Which includes some interesting buzzwords like stealth, disruptive, pivot, value prop, inflection point, and my personal favorite, hockey stick. Which can be used as a descriptor for growth, revenue, staffing and other business goals.

Within the investment community, they also know the latest and greatest startups, how to summarize and contrast them. And per se, that’s a good thing. But it results in an esoteric knowledge people outside their bubble may not know or care about.

To demonstrate my point, please take the following quiz, and see if you can identify the categories each of the 10 startups compete in. They’re from the 100 AngelList Startups To Watch In 2013. Here’s a link to the full article:  100 AngelList Startups To Watch In 2013

BTW, if you take this quiz, please know the answers are listed at the end of the post. Here goes:

•    Thumb
•    Wanderfly
•    Space Monkey
•    Umbel
•    Smore
•    Class Dojo
•    Munchery
•    drchrono
•    Circa
•    Tactilize

I trust my point about using other brands as reference points…that may have little or no meaning to those outside the startup and investment communities…is now quite clear. But it begs a more fundamental question.

Even when the reference brand is well known, like an Amazon, why make the positioning comprehension process so difficult for people other than investors?

If the startup says they’re the Amazon of (blank) category, what does that really mean? Wider range of choices? Better customer service? Ease of use? Return policies? Something else? And why are you asking me to connect the dots in the first place?

This whole notion violates both common sense and the six-second branding rule. Very few ‘regular’ people will be able to make the correct connection(s) that quickly. They’ll not try, give up and perhaps never consider the brand again. Which is the exact opposite of the intended goal.

My contention is that the smartest solution is to discover the startup’s brand before it is ever announced, publicized or marketed. Invest the time and money upfront to conduct brand discovery research, develop a single-minded brandcept, positioning strategy and tightly scripted six, 30 and 90-second brand messages. Maximize the opportunity for the startup’s success and its marketing ROI from the get-go. Seems pretty clear to me…

I’d appreciate knowing if you’ve seen this X of Y startup positioning comparison yourself, if you agree with my POV, and also how you fared on the quiz. As promised, here are the answers.

•    Thumb: a mobile social network to get instant opinions
•    Wanderfly: virtual travel discovery
•    Space Monkey: moves cloud storage into your home
•    Umbel: measures billions of audience traits
•    Smore: build online flyers and publish instantly
•    Class Dojo: behavior management software for teachers
•    Munchery: home-delivered meals from local chefs
•    drchrono: electronic health records built for the iPad
•    Circa: news without the fluff, filler or commentary
•    Tactilize: real-time publishing on the iPad

Have a good rest of the week. Thanks.

Chris Grindem has 30-plus years marketing experience with multinational ad agencies, a Fortune 50 corporation, top research university and leading several startups. His passions are marketing effectiveness and helping others succeed. Chris can be reached via The Utmost Group, LinkedIn or Google+.