Digital communications and social media have empowered consumers, whose voices can be heard loud and clear.
As has always been the case, the fate of a business is often determined by how well it generates consumer delight. However, these new platforms have provided consumers a bully pulpit like never before. Early stage companies able to react quickly to customer feedback are finding they are better suited to grow fast and outpace big, established businesses that are historically slower to move. We have seen the best of these early entrepreneurs pair an ability to foster, harness, and respond to consumer feedback with advanced technology and tools to get to product market fit and scale with far less capital than ever before.
Recently we sat down with some of Maveron’s portfolio entrepreneurs who have proven themselves particularly skilled at harnessing consumer engagement to quickly grow brands. These pieces of insight, taken together, provide a decent playbook for any entrepreneur looking to scale a business.
1. Get comfortable with internal technology and big data.
“Without data, you don’t really have a consumer business in today’s age,” says Jake Schwartz, co-founder and CEO of General Assembly, which provides working space and education to entrepreneurs. Now is the ideal time to start a consumer business, he says, because traditional barriers of entry have completely broken down. This open terrain gives entrepreneurs an opportunity to aggressively innovate around product, distribution, and marketing to build brands that resonate with consumers — and, most importantly, to mix the art of brand building with the science of data. Schwartz encourages entrepreneurs to become comfortable with their own internal technology and internal data, and use both as the central tool in making decisions.
2. Never run out of cash, and never run out of heart.
Two things that can lead to certain death for any startup are lack of cash and lack of heart, says startup veteran and PayNearMe CEO, Danny Shader. “Raise the money before you need it! Given the choice between suffering a little more dilution because you didn’t wait until the last possible value creation moment and running out of dough, I’d opt for the former and try to make sure we have at least a year’s cash in the bank before we raise money,” adding that entrepreneurs strapped for cash might possibly take terms they don’t like. When working with investors, Shader also suggests that entrepreneurs work with VC firms that “have your back and add value that goes beyond money.”
3. Create a visceral emotional brand.
The difference between a cool, new product and a big, lasting brand is outsized consumer passion, the bit of magic that makes someone love your product so much that it becomes a meaningful part of their lives and they can’t help but tell all their friends. The intersection between brand building and technology has ignited a rise in high-end online retailers over the past five years, but it takes more than an e-commerce website and social media profile to connect with consumers. Michael Preysman, founder and CEO of Everlane says, “The most important piece to building a brand is to have a very strong point of view that doesn’t exist in the market today, and that people are receptive to.” His company, Everlane, offers luxury clothing online without the added markups from manufacturers, retailers, or middlemen. If people love your products they’ll love your company.
4. The best leaders think about others before themselves.
Leaders set the culture of a company, including an ethos of thinking about others before themselves and what’s best for a business before an individual. But in the fast-paced early days of a company, balancing the many requirements of the company and team members, both professionally and personally, is often among a CEO’s hardest jobs. Iggy Fanlo, co-founder and CEO of Lively, a health and wellness startup that is helping the aging population stay connected with family and friends, says that entrepreneurs need to remember that “people don’t need a lot of you some of the time, they need a little of you all the time.”
5. Passion, then more passion, but it works both ways.
Finally, a word from me. In my 30 years working with consumer companies, I’ve worked with many highly respected entrepreneurs who have created enduring consumer businesses. During that time, whether it was Starbucks, eBay, or hopefully the next billion-dollar brand, zulily, the one commonality is passion. It sounds so simple but it isn’t. An entrepreneur and their team have to have passion and driven by a vision to seamlessly integrate their product or service into the every day lives of consumers. To do that, however, the team has to instill a sense of passion into their customers and that only happens when you obsessively focus on exceeding their expectations.
[Image courtesy saxarocks]