You can say anything you want about Warren Buffett, but one thing is for sure – the man knows how to make money and that is why it is a good idea to listen to what the man has to say.
Among other things, he says,
It takes 20 years to build a reputation and five minutes to ruin it.
And while startups do not exactly have twenty years to build up their reputation, it is just as important as one that has been allowed to percolate for two decades. Also, the five minutes needed to destroy goes for startups, too.
In other words, startups have to be extra serious about building their reputation, especially in this climate where an enormous number is being launched indiscriminately as if it was a golden ticket to fame and fortune (which it rarely is, unfortunately).
Establish a Core Idea
This may sound like a really “startuppy” concept, but a core idea is a start of creating your startup’s reputation, for a number of reasons.
First of all, it will give your startup some weight, something besides its name and the product or service that it is about. For example, your startup might be working on a tool that will be used in email marketing. There are dozens of startups working on something similar and a cool, quirky name is not enough to set you apart.
You need an idea that will resonate with people and set your brand apart.
Your startup can, for example, provide the tool for free for educational and healthcare organizations when they are doing their fundraising campaigns. Or, your core idea may be to spend half of your profits above certain revenue on charity. Or it can be something in a completely other direction. For instance, you may decide to only hire people who come from less well-off parts of the city or the country. Or, you may set yourself apart as the most open and flat organization that has ever been.
This kind of an identity can go a long ways to not only setting you apart from your many competitors, but also to getting you in the media. This will be local media and your local incubator at first, but as time goes by, who is to say that you will not garner wider recognition and attention?
In addition to directly raising your profile and reputation, this core idea will also be a great tool in having a focus that many startups lack and that leads to lapses and bad decisions that directly and indirectly affect their reputation. Furthermore, with a core set of values, it will be much easier to have a homogenous team that is working towards a common goal, which can be quite difficult to do in a startup.
When you read an article that mentions an interesting-sounding startup, what is the first thing you do? You do a bit of research.
You Google them. You check out the local incubators and startup organizations to find out more about them. You visit their website. You spend ten or fifteen minutes reading their blog. You check on social media. If you have contacts in the industry, perhaps you talk to them and try to find out about this new startup (if you’re really interested).
Investors do even more research than customers and it goes much deeper than this.
A startup that is nowhere to be found is immediately hurting its reputation. If they are that great, why doesn’t anyone talk about them? Why don’t they post on social media? Why are they not attending meetups? Why are they not at industry trade shows?
As you can see, being everywhere as a startup really means being everywhere – both online and offline. While the vast majority of startups remember to be present online, there are many that forget about the offline world; the world of meetups, trade shows and other networking opportunities where they can raise their profile and even get some new insights into competition and ideas for future moves.
Be present. Be incessant. You need to cut through the noise.
Anyone can try to attract new customers by saying their new piece of software is the best thing since sliced bread. Anyone can try to attract another round of investments by building up a Potemkin village that will stand for a while until the cracks start showing. Anyone can pump this newly-invested money into non-essentials, trying to patch up those cracks.
One day, however, the jig will be up. One day, the world will realize that there is nothing but a façade there.
In other words, the startup will definitely fail to deliver.
When that day comes, the reputation of the startup will be in shatters and there will be no way of returning from it.
Perhaps the best example of this has been Theranos, a once-upon-a-time favorite of some of world’s largest startup investors who sank millions in a façade. Sure, Elizabeth Holmes (the brain behind the whole Theranos fiasco) will get a great book deal, but her business reputation will never recover.
Theranos as a company is doomed and facing serious litigation. Its reputation is non-existent. It is toxic.
They failed to deliver. They promised to change the way we do blood tests forever and they promised to do it at the fraction of a price.
They didn’t deliver.
As a startup, you have to deliver. It really is as simple as that. It is the basic principle of business and business reputation.
Respect Your Customers
Running a startup is not easy. This is probably the only 100% truth about the startup ecosystem. Running a startup requires a unique vision, almost fanatical amount of hard work and a lot of luck (no matter what they want you to believe).
In such a situation, many startups lose sight of the most important aspect of running a business – providing their customers with that they want.
For some startups, this is a problem that starts early on, before they even have customers. They completely misread the market and they do marketing for something no one wants. Other times, they change their product so much that it stops being what their customers want. This is something that can easily happen with startups that get so obsessed with their product that they do not notice their customers shifting away.
Respecting your customers also means hearing them out and helping them out in any way possible. Maybe you plan on cashing out as soon as a buyer comes around, but this does not mean that you can ignore your customers, especially the early ones who are more likely to become the ambassadors for your brand.
Finally, respect your customers when doing marketing. Treat them as intelligent and informed people they are.
Be Ready for Problems
Things go wrong in startups. The market is nowhere near as big as it seems. The KPI data is not coming in fast enough to make timely pivots. Deadlines are not being met. Someone goes online and blasts your startup on Twitter. You suffer a cyber security breach.
All of these (to some extent) harm your reputation. The best way to start dealing with them is to do it before they even happen.
By being ready.
If you are letting down your customers or investors, it is absolutely crucial that you are upfront with them and that you own up for everything that you did wrong. Sometimes the reasons will be out of your hand and you will want to explain this to the people who have been negatively affected by the problems you encountered.
It would also be a good idea to have a crisis management plan of some kind in place as a way of handling problems in a structured and calm way.
When it comes to managing your online reputation, it is something that takes a bit of time and a structured approach. For that, you must have great insight into the basics of online reputation management.
Identify your set of core values, be omnipresent, respect your customers, always deliver and be ready for things to go wrong.
Believe it or not, but this will build a superbly strong foundation for a reputable startup. Once you handle the basics, building on top of it will come easy.
Dan Radak is a marketing professional with eleven years of experience. He is a coauthor on several websites and a regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies.