Branding for startups goes beyond logos and colors. A strong brand builds trust, lowers CAC, and drives retention. From standing out in crowded markets to motivating employees, discover how startups can create lasting impact with consistent, authentic branding. In our previous blog posts, we mainly focused on sharing useful knowledge and tips for product and business development, such as the correct use and pitfalls of the Lean Startup methodology, searching for and achieving Problem-Solution Fit, and the importance of secondary market research reports. This time, we focus on branding for startups, a foundation every successful business needs.
What is branding?
A brand is the sum of tangible and intangible characteristics that define the complete identity of a business. It creates an image in people’s minds – not only for customers but also for investors, other market players, and even employees. That is why it is important for the company to communicate its values and convictions through its brand, reflecting its fundamental purpose. During branding, entrepreneurs actively shape the company’s image. It must be closely linked to the marketing and sales strategy and should guide decision-making.
A brand should be treated as a strategy since it plays an important role in positioning – i.e., where our brand stands among other brands: is it more youthful or more premium? Branding is crucial because it is the factor that allows our audience to emotionally connect with our company, and it also determines how the company and its products are recognized in the market.
Brand strategy consists of two important parts. The first part should include product innovation (design, new products) and market development (pricing, communication, sales channels) initiatives. The second part is brand value management, which involves actively handling both the positive (e.g., popularity, recognition) and negative (e.g., bad reputation) aspects of the brand.
A common misconception is that a brand is identified solely with its visual identity and other graphic elements. While designing a brand’s visual identity is an important component, the brand also consists of many other elements, such as product innovation, market development, and brand value management. The tangible elements of a brand’s identity include the logo, colors, packaging and product design, website and social media, typography, language, and form. Intangible elements include reputation, customer experience, loyalty, and relationships. During branding, attention must be paid to both types!
Why is branding important for startups?
1. Differentiation, standing out: One of the most important roles of startup branding is differentiation. In a crowded market, standing out requires a distinct identity that belongs uniquely to the company. This identity helps customers distinguish one product from another and differentiate between companies. The brand is also a key defense mechanism against competitors and copycat businesses!
Increasing profitability: Branding enables price and profitability increases because customers are attached to the brand and are less sensitive to price changes.
Recognition and awareness: We have done branding well if our audience recognizes our brand, notices the attractive visual elements, stores it in their memory, and when they encounter a problem, they remember it and turn to our business for help.
From these two factors, it follows that branding makes it easier to acquire customers, reducing the associated costs (CAC – customer acquisition cost).
2. Trust: One of the most important tasks of a business is to gain customers’ trust. Branding can ensure this by communicating professionalism and reliability. This requires long-term commitment and consistent messaging – not only towards customers but also towards potential investors and partners.
Customer retention: Branding is not just a tool for attracting attention but also for retaining customers. Since the brand showcases the company’s personality, people can emotionally connect with it. This emotional connection increases customer loyalty, meaning they are more likely to choose your company in the long run. This increases the time they spend with the company and the total revenue realized from a single customer (CLV – customer lifetime value).
3. Efficiency and utility: Branding is closely linked to marketing strategy and advertising. A strong brand uses integrated communication, ensuring that advertisements align with the company’s values and identity. This also makes it easier for customers to associate ads with the company.
Reduced CAC: Customer Acquisition Cost (CAC) measures how much it costs (advertising, marketing, billboards) to acquire a customer. A lower CAC means the brand can attract consumers at a lower cost.
4. Employee motivation: It is important that employees within the company respond positively to branding and feel a sense of ownership towards the brand. This is not only crucial for the attitude of the existing workforce but also for recruiting future employees. Increase their motivation by sharing that they are part of something bigger – the brand can communicate this “greater purpose,” making it more visible and tangible, something they work for every day.
5. Long-term growth: Branding has a long-term impact. Don’t forget: what you build today will continue to shape itself in the future.
6. Brand activists: A strong brand can build a community that can drive market growth, which can be very important for a startup.
How to start branding as a startup?
Know your company!
At the beginning of the process, you need to define the main goals and values, as the entire brand must be built around these core elements. So, the first step is to determine what you want to communicate about the company – thinking about the unique values that characterize your product can help.
Know your target audience!
Another important element of building brand identity is understanding the other side – your customers – since you will be communicating to them. Creating personas (semi-fictional characters that represent the ideal customer) can be useful. Understanding how your target audience sees the world helps determine how to tell them who you are, why they should choose your company, and allows for more targeted messaging, contributing to the emotional connection mentioned earlier.
Build the brand!
Visual elements are key in branding. They must align with the company’s values and target audience while also ensuring differentiation. Creating a unique brand should also help you claim your desired market position against competitors. Although visual elements play a significant role, other elements must also be considered. To ensure consistency, it is advisable to create a brand guide that helps employees and subcontractors understand the brand. Writing down as much as possible in this document is essential for consistent communication across all channels.
Monitor and adjust!
The work does not end once the brand is created. The brand must be “maintained” daily, engaging with customers to strengthen their attitude towards the company. Decisions should align with the brand, and any changes must be gradual to avoid deviating too much from the image customers have formed.
Co-create with customers!
A significant part of a brand is how outsiders perceive the company. Actively involve them in branding! You can even assign them specific tasks like designing a logo or coming up with a slogan. Their discussions also shape the brand’s perception in the community, so it is worth coordinating these interactions. These engagement-driven processes further strengthen people’s commitment to the brand, increasing loyalty.
Don’t forget your personal brand
Your startup’s brand begins with you. Before people know your product, they get to know the founder behind it. A clear, consistent personal brand helps you build trust, attract investors, and communicate your company’s vision authentically. If you need help with this, check out our Personal Branding service for free feedback and practical tips.
Dangers on your branding, watch out!
- Trends: When it comes to branding, following trends should be avoided, as it takes away uniqueness. The essence of a brand is precisely to provide uniqueness for your startup and differentiate it from competitors.
- The weight of negative feedback: Every action of a company is tied to its brand, so a negative experience also contributes to its reputation – just in the wrong direction.
A great example of this is the famous “United Breaks Guitars” song, where a poorly handled customer experience led to a video that now has over 20 million views. - Redesign: Feedback should be carefully considered; if necessary, branding adjustments should be made cautiously.
For example, Tropicana’s 2009 packaging redesign received such negative feedback from both consumers and critics that within weeks, their sales dropped by 20%, forcing them to revert to the original design. - Misalignment with core values or target audience:
For instance, McDonald’s once marketed a new type of hamburger as an “adult burger,” presenting it in ads as something children would find unappealing due to its “grown-up” nature. However, the campaign failed – adults still preferred the classic hamburger.
Examples of branding for startups:
Munch's entire brand is built around environmental protection. They first created a community to collect tips against waste before even launching their service, making it natural for their current social media communication to focus on this as well. They coined terms like "muncholás" and "muncholók," directly linking this activity to their brand name.
Build a story around your brand and expand on it in your communication! This can be a great strategy since people tend to remember stories more easily. A good example of this is Diverzum: founded by students for students, their entire brand is based on this entrepreneurial story. In their communication, they frequently emphasize that they do everything for students because they are (or were) students themselves and understand their struggles.
The importance of an entrepreneurial story is also evident in Amigos, where even the company name reflects its origins - it started as a group of friends. The friendship between members and children is the core value of the business, which is highlighted in their communication, such as during volunteer recruitment.
If your startup is still in its early stages, you don’t need to invest large sums in branding, but you must dedicate time and effort to it. Consistency is the most important factor!
