This is the fifth article in a small series of punches surrounding April Dunford's Obviously Awesome! and how good positioning relates to good branding. Please read the first article, second article, third article, and fourth article before jumping into this one.
You know what the alternatives are, you know the special things that make your startup unique, you've established what makes that valuable, and you know who finds it the most valuable. Now, what frame of reference can you give to customers that will help them understand who you are?
This is accomplished through establishing a market category. For example, an automobile is a specific market, motorcycles are another. If you say your startup is going to be an automobile, it is assumed that it will be some kind of four-wheeled transportation. If a motorcycle, it is assumed it will be two-wheeled.
Same thing applies to software. If you are building out a creative software, it's assumed it will be capable of creating artwork digitally. Or if you were creating a video conferencing platform, it'd be assumed you could do something like connect with others via teleconference.
Why does this matter? Because it's important to make sure you don't allow for false assumptions. A famous mash of market category explanation is "it's like Uber, but for (blank)." What does that mean? It means that whatever you're building is going to have something to do with transportation, the shared economic model, and probably be app based, right?
When you repeat those assumptions to startup founders, you frequently get a response similar to, "well, kinda."
Ouch. Bad move. Now you've got a bigger problem. Now you have to combat assumptions and pay close attention to fix them.
At its core, market categories and choosing to associate your company with one is done to make your marketing easier. This happens because, when done right, those assumptions allow you to cut straight to the differentiating pieces of your startup rather than trying to explain what it is.
What does this have to do with branding?
I'd guess the biggest impact this has on branding is the ability to see what assumptions are already in place about the emotional value of the category. The companies in each market category have stigmas, jargon, and they tend to adopt similar brand personalities. You have the opportunity to break those assumptions and create a unique personality.
One company that comes to mind is Liquid Death, who blew past expectation when they took a death-metal inspired, brewery-like approach to selling water. They entered a crowded market with few companies straying from a fresh, clean, and renewing vibe. We know what it is, water, and because of the market category we are able to ascertain what separates it from the rest of the herd.
My mom is a sales rep who works with pet store retailers. Some small and some large. She told me recently that a store she visits has over 6400 items on sale. 6400!
But that means they sell a lot of stuff, right? They probably need all of those items. Still, my curiosity wasn't satisfied. I asked, "why sell so many?"
Apparently people are more picky about their dog's food being gluten-free, paleo, with/without certain ingredients than most people are with their own nutrition. In short, they are trying to please everyone by having all of those needs met. No matter what pet you have, no matter what its needs are, they are trying to sell it.
I can't know for certain, but I'd imagine 80% of their sales comes from 20% (or less) of those 6400 products.
When Steve Jobs returned to Apple in 1997, the first thing he did was strip away 70% of Apple's products and got them focusing on what really mattered. Surprisingly, despite getting rid of a bunch of products, Apple turned its first quarterly profit the following January (see timeline for comparison). Apple didn't even have 50 products and they still struggled to keep their head above water. Can you imagine the crippling weight of 6400 products?
In-N-Out, the most successful burger chain on the west coast, sells cheeseburgers (with varying amounts of meat/cheese), french fries, shakes, and soft drinks. Each store does about $4.5M in annual sales and they have over 300 across the country. When people come to In-N-Out asking for a change to a menu item, they say "sorry, this isn't for you."
By turning away some people, they have a streamlined business offering and they become known for it. It exudes confidence and even people who can't or won't eat a cheeseburger respect that. The same could be said of Apple and people who want to change their offerings.
In the words of Seth Godin, have the courage to say, "this is not for you, but it is for someone who believes this."
Most of the startup world is focused on getting bigger, expanding, scaling, and a long list of adjectives all pointing to gaining more.
Unfortunately, this mentality leaks into startup branding efforts as well.
Have more colors, have a bigger logo, more subbrands, more typefaces, more messages. More, more, more, more, more.
The issue with this mindset is that it is the complete opposite of scalable because you are reinventing the wheel every time you embark on a new branding effort.
Ask yourself, what is in the way of us getting our point across and connecting with our tribe? Then get rid of it and cut straight to their hearts.