Most SaaS Companies Lose Millions at Exit Because of Weak Branding

Backstory started about eight years ago as a response to feedback I got from clients and employers who kept telling me, jed, this brand strategy and messaging piece of marketing is your superpower. Lean into it. So I listened and I looked for opportunities to consult and that grew into word of mouth referrals. I was fortunate to be introduced to Bamboohr initially when they were just 30 people, now they're north of 1300 people. Helped the founders Ben Peterson and Ryan Sanders articulate their why and build their first messaging framework and brand narrative. That led to other introductions. Rob Nelson at Grow, which has since exited they're a BI tool for small and mid sized companies. They competed in provided a democratized version of decision making in the domo and tableau enterprise environment for BI tools. And LucidChart was wanting to go from individual licenses to enterprise licenses. We worked with them and that just created an avalanche of opportunity here in the Silicon Slopes area in the Salt Lake City, Utah market. And since then we've expanded nationally and internationally so it's been a fun ride.

Working with founders is a rewarding experience because you're dealing with people who have vision and they're working really hard at realizing their vision. And they always see years down the road as to what they envision the product and the offering, the platform will grow up to be and envision it in its mature state. And at the same time you have to position and market what the product, what the offering is today. Reconciling the vision with the reality is that gap that the backstory brand wheel framework addresses by helping you get your story straight so you can scale your success and grow beyond founder led sales. So I really am passionate about putting principles into practice and having practical tools that actually make a difference and help companies grow and create value. Ultimately, I think that's what people imply when they talk about growth. The corollary is that if we grow, we're going to naturally create value that's transferable. And we've been fortunate to work with a lot of companies that have had terrific either fundraising events or liquidity events. And we're mindful of the fact that we're ultimately responsible for multiplying value. And that's why we're interested in being practitioners and not just pundits, because we ultimately want to be as close as we can to value creation.

You're absolutely right, Nicholas, that the essence of brand strategy is being different and relevant when others are zigging? You've got to zag. The founders that we've worked with that have had the most success are the ones that believe in having a rationale for where the brand is going. Instead of making arbitrary decisions about preferences in relation to something like a visual brand identity, a logo, for example, instead of saying I don't like that color or I don't like that typeface, they hold up the brand strategy and the design brief and say, how well does this expression of the brand visually match up to the strategy? So there's a strategic rationale that's driving their decision making process. Instead of personal preference, they're asking themselves, what does the brand want to be when it grows up? And they appreciate data driven recommendations. And that's another essential tenet or principle of our practices to provide and supply data to support our recommendations. Not only does that help decision makers make good decisions, it also helps to create alignment across other leaders and departments so that you can go to market in a unified way. That unity leads to alignment, which leads to momentum and accelerated growth.

It can be, and we've worked with some clients that operate like a weather vane. Whichever direction the wind is blowing is where they're going to point. But you end up with a fractured fragmented identity crisis. When the wind settles and you're left with this mixed bag of a mashup of fragmented activities and pieces of concepts and ideas, you're unable to clearly communicate what you stand for, who you are and why it matters. And that's the opposite of what we try to provide, is that long lasting guidance that builds brand equity and revenue and profitability at the same time.

When it comes down to it, a brand is the promise you keep. And you've got to be able to articulate a promise that's compelling, that sets you apart from competitors, including the status quo. So you've got the status quo, you have indirect competitors and direct competitors. How do you set yourself apart with what you're promising and then how do you keep your promise? Creating a brand that resonates both inside the company and outside the company is one of the best ways we found to enhance and multiply the value of your company. So you can command a premium at exit because you're consistently living up to a promise that matters to customers and partners. When I think back to great brands we've worked with, there was a meaningful and deep commitment to keeping those promises and being able to articulate those promises, not just at the company level, we call that brand marketing or messaging. But combining that with audience specific messaging, including employees, allows you to have integrity across all your audiences and keeping that promise. And there are so few brands that keep their promise today that it gives you the ability to command a premium multiple when you exit by having these trusted relationships. And that shows up in sales, but also retention and lifetime value because you've demonstrated that you're able to sustain that promise keeping mindset and culture over time. So the sooner you can articulate what you want to put out there in the market as a meaningful differentiated promise and then keep it over years to sustain that trusted relationship, it multiplies your value because now you're showing that you're able to sustain that kept promise over time.

I wrote this book because a lot of companies, especially SaaS companies, fail to ask a key question when they're young and getting started. And that question is what do we want to be when we grow up? Asking that question early and taking the time to build a strong brand foundation informed by insights that come from brand discovery puts you in a position to be able to put all of your energy, effort and investment into building a brand that can actually scale and grow with your business instead of having to rebrand, which is something we've helped facilitate for a number of companies. One of them was Demo Chimpanzee. A good friend of mine and serial entrepreneur named Garen Hess founded a company called Demo Chimp that was the first demo automation company. He identified an unmet need in the market where pre sales engineers were giving software demos that were one size fits all. No matter who you were, no matter what your role was on a buying committee, you were subjected to a demo that took you through the same conversation indiscriminately and you might have only found 20% of it to be relevant to what your specific pain points or jobs to be done your use cases were. But you had to sit through this demo almost like a ride at Disneyland where they sit you on the in the ride, buckle you in and say you'll be let out when the ride's finished with you. He recognized that if we could compartmentalize, deconstruct the demo into component parts, let the audience decide what to see and how much to engage with it, it would be much more meaningful and effective way of introducing someone to a software solution. He started getting consensus from customers that the real problem that Demo Chimp was solving is driving consensus among buying committee members. I was his VP of marketing at the time and so we rebranded to Consensus. It was my recommendation, let's change the name to go from SMB humor at the Demo Chimp level to an enterprise credible name like Consensys that signals and communicates, suggests the value that Consensys provides to its customers. Garen and his team have gone on to build a top ranked, up and to the right G2 rated brand, the leader of the intelligent demo automation space. They raised $110 million a couple of years ago, which means that somebody out there believes they're a billion dollar company. And it's a credit to Garen to be willing to recognize an opportunity to pivot. But that really was an example of how to build a brand that scales. So if you can anticipate selling to enterprise customers at the beginning, how might that inform what you call the company and how you build that brand foundation? The inner circle of that brand wheel framework that you mentioned, which is really the heart of the book, it talks about how to build a brand that scales using the backstory brand wheel framework. And you can take a feel a free brand wheel assessment on the Backstory website backstorybranding.com to assess your current readiness to scale. I wanted to see if I could help other founders skip that step of having to rebrand by anticipating that growth from the beginning.

I will. Now the patent was an opportunity to participate in an instrument when I worked at Nu Skin Enterprises. They're a personal care products company. And I was a brand manager and had the opportunity to help develop an instrument that would assess your skin type and recommend a product based on that assessment. And the process that we went through was pretty intensive. One of the things that was most gratifying about developing that capability was demonstrating it. Speaking of demos at the Nu Skin International Convention. It was held in Salt Lake City and dozen people from around the world converged on the convention center in downtown Salt Lake City. And nu skin's over $2 billion now in value and we had a large contingent of distributors. It's a direct selling company from Japan and I Remember, we had a little booth where we were demonstrating this instrument for the first time, having worked night and day literally to get it ready in time for this conference, this big show. And we had 5,000 people running toward us, many of whom were Japanese. And it was so interesting just to see how excited they were to be able to have a personalized assessment of their skin type and then get that product recommendation. And they were able to translate that enthusiasm into a new business opportunity to take back to their home market. The one on one direct human centered design experience, or component of that experience, was consistent with what I learned at ideo just out of grad school at Northwestern University there in Evanston, Illinois. I was going to a professor's office for consultation and noticed that there was this really cool window display. And I didn't know, but I was stepping into the next chapter of my life when I went inside just to find out what they were doing. I'd taken an industrial design class in my undergrad studies at Brigham and Young University and I studied design undergrad. And that was one aspect of that undergrad experience. And so I knew enough about industrial design to be dangerous. And come to find out, IDEO had a Chicago studio in this incubator right there as part of the university ecosystem. And I became their director of business development and marketing. And it was a terrific experience, taking some of what I'd learned in grad school about insight driven branding and marketing communications and learning how insights could inform product strategy and design and development. So there were some really compatible principles and belief systems. They were just applied differently. And so that ability to understand the underlying drivers and motives and needs of people, needs that they sometimes can't even articulate, is at the heart of what IDEO's methodology is all about. And I was able to combine both the marketing and the product design and development later on in my career when I was at NU Skin, when I was part of developing the patent worthy technology that you mentioned a minute ago. So those IDO early days have found their way into the work I do now by doing human centered brand positioning and messaging, where we put a priority and prize insights to inform brand strategy and messaging development.

I don't.

company, running a marketing department is kind of a thankless job. If you're doing well, it's almost like you've neutralized the negatives. It's really hard to sustain above the line performance because there's so much shifting and changing. I think CMOs have one of the shortest tenures of any executive and I think one of the reasons for that is marketing is so visible that you've always got a target on your chest. I also didn't love demand gen and lead gen. That wasn't my focus or my jam. I'm a really good compliment to the person who wants to manage and run those systems. In fact, in the book I talk about how the brand wheel framework is a blend of the best of brand marketing. In the inner two circles, brand foundation and brand expression correspond to brand marketing. The outer ring, brand activation is where performance marketing lives. So the model and framework allows for the blending of the best of both worlds. I'm the brand marketing expert and I pair really nicely with specialists who in the outer ring who do website design and development, drive traffic, build funnels, do roas and SEO. And we partner beautifully with those performance minded partners who sometimes don't have the time or expertise to go deep and unpack the foundational and expressive elements of a brand. When you pair those together, watch out. That's when you get the big breakthrough.

I think it is a mistake to change the marketing leadership too frequently. It's almost like rearranging the deck chairs on the Titanic. Because there are so many times when marketing gets blamed for more systemic problems. My experience has been that if you have a insight driven approach to strategy and continue to learn and iteratively refine what you're basing your decisions on, that will better serve you than to think that you're going to bring in a new playbook from a different company, maybe a different industry, a different size of company. I think that's the biggest mistake people make is they think we're just going to take what worked over here and magically apply it over here. It takes time to see that that's not going to work. And by then it's time for a regime change. And you keep churning through playbooks instead of practicing proven principles.

Backstorybranding.com or they can connect with me directly on LinkedIn.

Thank you, Nicholas.