Corporate Branding for Startups:
The role of vision, culture and image in shaping the
corporate identity and brand of startups.
Thomas Melchior van Til – 6336795 Master Thesis
30-06-2017
Supervisor: P. Verhoeven
Master Communication Science: Corporate Communication Graduate School of Communication, University of Amsterdam
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ABSTRACT
Creating a strong corporate brand and identity is becoming increasingly important for businesses to differentiate from their competitors. Existing research on corporate branding and identity has mainly focussed on large corporations, but never on startups. By conducting interviews with founders, this research aims to find out how startups use and asses
corporate branding and identity. The findings suggest that the dynamics of shaping a
corporate brand and identity in startups are more fluid compared to the VCI-alignment model by Hatch & Schultz (2008). In startups, culture and employees have a bigger impact on brand building than the other concepts. Quantitative research on successful brand building concepts in startups should be conducted to further explore these dynamics.
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INTRODUCTION
Global industries are growing rapidly and businesses come and go. From startups to Small and Medium-sized Enterprises (SME), to Multinational Corporations (MCN); companies face challenges on how to differentiate their products and services from the increasing competition in this fast-paced environment. To differentiate, having a well-established brand is paramount and corporate branding has become increasingly popular over the years due to the value it can add to any type of business. Companies that are led by entrepreneurs and CEO’s who understand the value of communicating about their corporate brand are considered to have an edge over their competitors. Van Riel & Fombrun (2007) stress the importance of the corporate brand and its growing effect on how we assess a company’s communication system. There is extensive research about the benefits of corporate branding and having a clear brand strategy in terms of differentiation, financial benefits, and greater brand exposure and awareness (Abimbola, 2001; Boyle, 2003; Hatch & Schultz 2008; Inskip, 2004; Ojasalo et al., 2008; Rode & Vallaster, 2005). Corporate branding as a source of competitive differentiation is therefore an excellent asset for businesses that need to survive and aim for growth.
In the early days, corporate image and its perception by external stakeholders were central in branding literature (Boulding, 1956; Kapferer, 1997). This focus eventually shifted towards a management-oriented view in which founders and managers have a crucial impact on corporate personality and identity (Balmer & Gray, 2003; Hatch & Schultz, 1997; Olins, 2017). Arguably this shift was initiated by Stephen King (1991) who elaborated on the difference between product and company brands, stating that consumers would base decisions more and more on the people and company behind a product, rather than the product itself. The company’s ability to communicate their brand values would therefore be crucial. Moving away from the usage of just logo’s, graphic design and other visual
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expressions, the focus shifted to how managers tackle the challenge of defining and expressing a brand’s values both internally and externally (Chernatony, 2010). Corporate branding became strategic in the sense that multiple communication efforts need to be considered, managed, and aligned. CEO’s and founders should be responsible for orchestrating these efforts which are considered as part of the process of ongoing organisational change and creating a corporate identity and brand (Aaker, 1996; Bernstein, 2003; Inskip, 2004; Krake, 2005).
Startups could benefit greatly from these corporate branding efforts. However, just like startups, research on corporate branding, identity and brand building in startups is still in its infancy (Boyle, 2003). This may have to do with the fact that branding is often considered a privilege of big corporations. Existing literature on corporate branding mainly focusses on SMEs and MCNs (Abimbola & Kocak, 2007; Krake, 2005; Hatch & Schultz, 2008). Because of the lack of research on corporate branding in a startup context, it is unknown whether the same processes and principles for building a corporate brand apply as they do in larger businesses and organisations. Considering Bernstein’s argument and the fact that startups are often relatively small, the impact of the founders on building a corporate brand is substantial. Founders are responsible for the identity of the startup and make decisions about what values they want to communicate to both external and internal stakeholders. They can build their brand from the ground up and do not suffer from heritage and previous perceptions the way SMEs and MCNs do. For startups this is crucial, because they need to be able to establish their corporate brand into the market in a relatively short amount of time. If they don’t succeed in doing this, they disappear from the market, resulting in a failed new venture (Timmons & Spinelli, 1999). Exploring the way startups manage corporate branding efforts will contribute to the literature and will provide insight on whether startups are engaged with building their corporate brand and how they do this.
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The current study focusses on exploring corporate brand building in startups and how the conventional theory that applies to larger businesses relates to a startup environment. By interviewing founders of startups, this research aims to explore the dynamics of brand building and their efforts in creating a corporate identity and brand. Because existing literature concerns mostly SMEs and MCNs, the questions is whether the communicative dynamics of corporate branding and the concepts that shape a corporate identity apply to startups as well. Therefore, the following research question will be asked:
RQ: How do startups use and assess corporate identity and engage in corporate brand building?
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THEORETICAL FRAMEWORK
It is important to note that a lot of the research about corporate branding has its root in marketing research. Since the nineties, the emphasis has shifted from line branding to corporate branding, which resulted in the need to approach branding from a managerial perspective. However, due to the increasing complexity of managing and coordinating branding activities, corporate branding isn’t just about planning external communication opportunities, but also involve the integration of internal communication activities to ensure cohesion and consistency in communicating the corporate brand message (Harris & Chernatony, 2001). Therefore, the concepts that will follow about branding, identity, vision, culture and image must be considered as an integral part of corporate communications.
Corporate Communications
Corporate communications are about the company as a whole, which comes from the Latin word “corpus” meaning “body” or “the whole”. It encompasses various concepts of communications, be it marketing communications, organisational communications or management communications. Van Riel & Fombrun beautifully illustrate this idea in the introduction of their book Essentials of Corporate Communication (2007):
“Communication is the lifeblood of all organizations: it is the medium through which companies large and small access the vital resources they need in order to operate. It is through communication that organizations acquire the primary resources they need (such as capital, labor, and raw materials) and build up valuable stocks of secondary resources (such as “legitimacy” and “reputation”) that enable them to operate.”
The primary resources are the resources needed for brand building which ultimately result in the stock of secondary resources: the corporate brand. It is important to clarify the definition of corporate communications, as the context is crucial in understanding the implications of
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corporate branding. There is still a lot of disagreement on how to approach these concepts. Definitions are often vague and take the notion of corporate communications for granted. Corporate communications is often used as an umbrella term to list different kinds of communication activities such as marketing communications, public affairs or other activities related to public relations.
A holistic approach to corporate communications functions as a “specific way of thinking that
pervades and shapes many different types of organizations” (Christensen & Cornelissen,
2011). This approach is strategically focused and considers corporate communications as planned and fully integrated within a company. It considers organisations as entities that exist of people who communicate with each other. “Communications flow vertically and
horizontally, internally and externally, formally and informally linking employees internally to each other, to various layers of management and to the many external resource-holders of the organisation” (van Riel & Fombrun, 2007). Managing and orchestrating these
communications is complex, but important. Organisations no longer organise communications; These communications organise organisations. And ultimately, the aim of corporate communications is to “manage all communications that involve an organisation as
a corporate entity” (Harrison, 1995). This is called the famous CCO perspective in which
organisations emerge in communication (Taylor & Van Every, 1999). Different communication efforts still exist, but now have the overarching goal to manage and organise all internal and external communication of a company. These communications organise, shape and generate organisations (Cooren, 2000). It is the bridging and strengthening factor between various concepts that make up the corporate brand or identity. For example, to establish a company’s identity and strengthen the corporate brand, corporate vision, culture and image should be fully aligned (Schultz & Hatch, 2005). Corporate communications can be a range of managerial activities that focus on integrating, coordinating, and orchestrating all communications of an organisation (Cornelissen et al., 2008). Thus, managers, founders,
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CEO’s, but also other employees, all play a crucial role in managing what sort of brand values they want to communicate and in determining the brand building strategy of a company.
Corporate Branding
Theory about corporate branding can be divided into two camps with one focussing on corporate branding as a strategic and integrated field, whereas the other camp emphasizes the product-driven and visual aspects of a brand (Schultz et al., 2005). In the early days, brands were merely associated with products and used as image-building devices. Branding was then considered to be sender-ended, assuming a one-way communication that ended with the customer. It wasn’t until recently that corporate brands evolved and took other stakeholders into account that actively shaped the organisation and its communication efforts, therefore contributing to the corporate brand (Balmer et al., 2010; Hatch & Schultz, 2003). Scholars are shifting more and more towards a view in which the people behind a company are more important than their product, a view that was initiated by Stephen King in 1991. Corporate branding is now seen as a dynamic process in which communication has a central place in orchestrating various efforts that make up the brand building blocks of an organisation. Founders and managers are continuously working out their purpose and what values they want to communicate to people inside and outside of the organisation. The corporate brand, therefore, conveys essence, culture, character and purpose of a company (Rode & Vallaster, 2005). One way to approach this is looking at the alignment of corporate vision, culture and image (Hatch & Schultz, 2008). Considering these three concepts as communicative brand building resources that shape the corporate identity, the importance of a holistic approach becomes apparent as all members of an organisation should behave in accordance with the desired brand identity (Harris & de Chernatony, 2001). This identity, which will be elaborated further on, consists of these three concepts.
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In organisations, this means communicating about these concepts, internally and externally, implicitly and explicitly. All efforts are then aimed at communicating a certain set of (brand) values to a variety of stakeholders who are important to the company. These stakeholders range from customers, to employees, to partners and suppliers; people that interact with the corporate brand. In this thesis, the concepts of corporate vision, culture and image aren’t considered in a one-way communication fashion, something Rode & Vallaster do in a research about corporate branding for startups. They explain corporate branding as “the
total sum of organisational signs that are being transferred to its various audiences” (2005).
In corporate communication a two-way approach is favoured in which communication about these values is an ongoing process and helps shape the company, its essence, meaning and with that, its corporate brand (Hatch & Schultz, 2005; 2008). Hatch & Schultz (2008) build upon the notion of a two-way communication approach and explain the corporate identity as a conversation that is constantly moving and evolving. Aarts (2009) explains that there is a constant process of adaptation between internal and external communication, resulting in a fluid organisation.
Because of the lack of research, it is unknown whether these principles apply in a startup environment. Existing research on how smaller businesses are engaged with branding mainly focussed on branding goals and communicating core values. Recent research found that brand names and values were inconsistent at SMEs and communication often remained vague and unclear (Bresciani & Eppler, 2010; Merrilees, 2007). Ojasalo et al. found that SMEs have poorly designed branding goals as they lack the time and resources, or are unable to even grasp the concept of branding (2008). They describe that these smaller companies fail to grasp the importance of branding, as they think branding is just for big companies. Considering this, it is interesting to explore how startups see branding and how the concept of corporate branding relates to their organisation. This is also pointed out by Abimbola & Kocak who emphasize the fact that a different starting point might be needed as
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startups differ from larger corporations in terms of resources, size and operations (2007). The first research question is therefore formulated as:
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Corporate Identity
While corporate identity and corporate branding share similarities and are heavily interconnected, there is a fundamental difference. This difference is mainly about the contrast between the internal viewpoint of identity and the external viewpoint of branding. Identity is concerned with questions as “who are we?”, “what do we stand for?” and “what is our main goal?” It involves the ‘who’ of the company (Balmer & Greyser, 2003) and should be considered as the internal part of the corporate brand (Rode, 2004). Nyman illustrates the corporate identity as follows:
“The corporate identity of an organisation is the anchor that keeps the whole ship (company) from floating away; it is the sum of the organisation’s inner core values and beliefs, and the way they are communicated and presented” (2013).
However, corporate identity is often not (yet) set in stone and should be considered as a liquid process, constantly moving and evolving. It demands a dialogue between the internal views of the company and the views that external parties hold about the company (Van Riel & Fombrun, 2007). This is especially the case with startups that are in an experimenting phase, often unsure in which direction they’re heading. Answering the fundamental questions mentioned earlier is hard and internal and external views rarely coincide. This stresses the importance of founders or the CEO, as these people are mostly responsible for the direction their company is going. Especially in small organisations, hiring certain employees greatly determines the working culture, as they take up a relatively big part of the organisation. The culture affects internal communication and ultimately how external stakeholders perceive a company through its employees. Employees become ambassadors of the company they work for and are the heart of both the corporate brand and identity (Harris & De Chernatony, 2001; Balmer & Gray, 2003). Hatch & Schultz argue that this vision of the founder, along with the culture and the image that the organisation has determines the corporate identity (2008).
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These corporate identities are the cornerstones that make up companies. While corporate brands can live a life on their own, be sold or separated from the organisation, a corporate identity is closely tied to the organisation. This is brilliantly explained by Balmer et al., stating that: “corporate brand identities exist in our minds; corporate identities inhabit organisations” (2010). Organisations have a great amount of control and influence on their corporate identity. While they should listen to all stakeholders involved with the organisation, founders and managers are still responsible for the direction they’re headed. Organisations have less influence on the corporate brand, which is born from the corporate identity, but is ultimately shaped by the stakeholder of the company (Balmer & Gray, 2003; Hatch & Schultz, 2009). A corporate brand is therefore a shared set of associations and meaning which creates a certain attitude towards an organisation. Thus, the fundamental difference is that a corporate identity has an internal viewpoint and the corporate brand an external viewpoint.
The premise for a strong corporate brand is a strong corporate identity, which leans heavily on the alignment of corporate vision, culture and image. Since establishing a corporate identity is more complex for smaller organisations than it is for larger organisations that have existed longer, it is interesting to see how this concept relates to startups. Do startups have a clear idea of their vision, culture and image, and if not, what does that mean for the identity of the organisation? How can startups engage in corporate branding when their identity is constantly evolving? These are questions that can hopefully be further explored by asking the following research question:
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Brand Building
Hatch & Schultz identify three main concepts that make up the identity of organisations: corporate vision, culture and image. For organisations to successfully establish a corporate brand, it is paramount that these three are aligned and part of the organization’s identity conversation, as explained earlier (2009). These constructs are concepts or resources for the brand building of an organisation, as they play a crucial role in shaping and communicating both the corporate identity and brand. Research on these constructs have concluded that they are interconnected and positively influence each other when aligned (Hatch & Schultz, 1997, 2003; Rode & Vallaster, 2005). Managing brands is difficult, because ultimately, you have limited control over how others perceive a brand. If stakeholders’ perceptions about the company don’t stroke with the strategic vision or culture of an organisation, this could lead to incongruity and a weak corporate brand. Since corporate communication is a two-way process, managers should engage in the conversation, constantly trying to align the brand building blocks, in order to achieve a positive attitude towards the corporate brand (Hatch & Schultz, 2008).
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Figure 1: VCI-alignment model. Hatch & Schultz, 2009.
The VCI-alignment model from Hatch & Schultz (2008) illustrates the brand building blocks in a relatively static manner. The brand building concepts form the foundation of a corporate identity which can be expressed in the form of a corporate brand. Hatch & Schultz build upon this model by stating that to achieve a strong corporate brand, these brand building blocks must be aligned. Misalignment of these concepts will result in incongruity and affect the overall performance of a brand (2009). The model incorporates the following concepts: Vision: “The central idea behind the company that embodies and expresses top
management’s aspiration for what the company will achieve in the future”.
Culture: “The internal values, beliefs and basic assumptions that embody the heritage of the
company and communicate its meanings to its members; culture manifests itself in the ways employees all through the ranks feel about the company they are working for”.
Image: “Views of the organisation developed by its stakeholders; the outside world’s overall
impression of the company including the views of customers, shareholders, the media, the general public, and so on”.
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The interplay between the different constructs can become quite complex. Aligning corporate culture with the vision top management has can become quite problematic in large corporations. Orchestrating preferred behaviour and creating guidelines on how employees should behave that are in line with the core values of a company are time consuming processes. While startups are small, and these processes should be relatively easier, they are in an experimental phase in which the vision and values are constantly evolving and can suddenly become completely different from the initial idea. In terms of image, branding efforts are becoming increasingly difficult for large corporations because of cultural heritage and existing perceptions from external stakeholders. Startups have whole other problems such as generating brand exposure and awareness. While this can be problematic in terms of image and visibility, it also creates the unique opportunity to build a corporate brand from the ground up. It becomes apparent that large corporations, SMEs and MCNs work and behave differently than startups, and it is therefore important to explore whether the same constructs and relations apply in startups (Abimbola & Kocak, 2007). Therefore, the last research question is formulated as:
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METHOD
Research design
The aim of the study is to examine corporate branding in startups, how they are involved with branding and identity and whether important brand building blocks can be indicated. Due to the exploratory nature of the research, a grounded theory approach was chosen as the research method. In this method, theories are derived inductively through systematically collecting and analysing data, trying to find patterns which ultimately lead to theories or hypotheses (Strauss & Corbin, 1990). Concepts are the basic units of analysis in this method and to explore corporate branding in startups, a semi-structured interview was conducted. Sensitising concepts were derived from the literature review, and used to create questions. These sensitising concepts were used as they lack a specific benchmark or attribute and can be used as a guideline or reference. “Sensitising concepts merely suggest
directions along which to look” (Blumer, 1954), which is a great starting point for grounded
theory research (Gilgun, 2005). The concepts were used as a foundation on which the research was build and the data collected.
The process of grounded theory building consists of five analytical stages that are not completely sequential: research design, data collection, data ordering, data analysis and literature comparison. The first step was to conduct literature research about how academics approach corporate branding. Three broad research questions were determined that would set the stage for an exploratory research, but are narrow enough to be focussed around the specific topic (Pandit, 1996). The phases will be discussed below and will give insight in how the data were collected and handled during the research.
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Sample
Participants were gathered through startup lists from Rockstart and iAmsterdam, or introduced via the network of the researchers and through appeals on social media like Facebook and LinkedIn. Participants were either introduced or reached out to by email, explaining the aim and scope of the research with the question whether they wanted to participate. After scheduling an appointment, an email was sent with the interview questions to give participants a better understanding of what they could expect. Before starting each interview, the interviewer stated that all information would be anonymous and handled with care. Participants could indicate if they wanted to leave out sensitive information that was discussed in the interview, after the transcripts were sent to them. The transcripts were only used for the coding and analysis phase, and will not be published in any way. This is in accordance with the ethical review procedure for research at the department of communication science, of the University of Amsterdam.
Defining a startup for the sample was problematic. There is little consensus in academic literature on how to define a startup because it is hard to identify a startup and to measure its activity. Startups are often young, small, and are constantly looking for ways to grow and to develop a business model that works to become financially healthy. For the purpose of the research a startup was defined as follows:
"A young, innovative, growth-oriented, business in search of a sustainable and scalable business model" (Steve Blank, 2013).
During the selection of the sample the emphasis was put on the amount of years the startup existed. The startup couldn’t exist for longer than five years. Startups with different company activities were selected to ensure variation in the sample and to exclude the possibility that certain dynamics within a startup are characteristic for a specific activity or industry. To
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ensure anonymity, the startups have been given a letter that will be referred to in the results section. The sample can be seen in table 1.
Table 1. Sample Descriptives
Company Activity No. of
Founders No. of Employees Years of experience Role
A Payment Technology 4 30 10 Co-founder
B Fintech Recruitment 1 26 10 Co-founder
C Online Payments 4 12 10 Founder
D Financial Education 2 5 2 Marketing Manager
E Chatbots 2 6 3 Marketing Manager
F Recruitment 3 3 3 Co-founder
G News Distribution 2 100 12 Head of Marketing
H Online Local Markets 2 11 10 Founder
I Industry Sensors 3 25 12 Marketing Manager
J Branding Strategy 4 9 5 Founder
K Live Music Marketplace 2 6 4 Marketing Manager
L B2B Music Platform 4 5 7 Co-founder
M Student Tech Job Education 1 7 3 Founder
N Recruitment 2 4 7 Co-founder
O Growth Hacking Education 3 18 12 Co-founder
P AirBnB of Live Music 1 15 6 Head of Growth
Founders (N=10) were interviewed at startups, because they can provide the most information and insights about how the startup has developed and what its vision and mission are. Marketing managers (N=6) were selected as a second option, because they are most concerned with communicating specific values to both internal and external stakeholders. As long as they are decision makers, both founders and managers can provide equally important insights about the vision, mission and culture at a startup and were selected because they are often the ones that make branding decisions in the company (Krake, 2005).
Data collection
Semi-structured interviews were conducted face-to-face (N=11) or via Skype (N=5). The whole process of interviewing took around 30 to 90 minutes. Face-to-face interviews were
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recorded with an iPhone 6 and online interviews with a call-recording tool called “Ecamm Movie Tools”. The recordings have an average length of 31 minutes with the shortest being 19:34 minutes and the longest 43:13. Skype interviews may seem challenging in terms of making participants feel comfortable and opening up, which can result in difficulties reporting the interview (Sbaraini & Cater, 2011). Others found that Skype interviewees are more responsive than in face-to-face interviews (Deakin & Wakefield, 2013). During Skype interviews, no significant differences were found compared to face-to-face interviews. There were no technical difficulties and no problems in getting desirable answers from respondents, which can reduce the quality of an interview according to Seitz (2015).
The interview consisted of four introductory questions (1. When was your startup founded?
2. How many founders does your startup have? 3. How many employees does your startup have? 4. What products or services does your startup offer?) to provide a general overview
of what the startup is and where it came from. Furthermore, questions about the brand building blocks that were subtracted from the theory of corporate branding by Hatch & Schultz (2008) were asked. Corporate vision, culture, image and branding, served as sensitising concepts during the data collection process. A question about the alignment of corporate vision, culture and image was added to explore whether startups were consciously putting effort in trying to align the brand building blocks and to see whether they thought they were succeeding in doing so. The interview guide served as a memory support for the interview to see whether satisfying answers were given on the different topics. Questions were not asked literally in each interview that was conducted. The full interview guide can be found in appendix A.
The process of transcribing the interview data was initiated before all interviews were conducted, but the phase of analysis did not start before every interview was transcribed. This to ensure that the analysis phase could be initiated with an open mind for true open
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coding, avoiding interpreting problems during the process. The transcription of the interviews was conducted with help of the transcription software from audiotranskription.de: F5. Guidelines for transcription were used from a white paper by audiotranskription.de to ensure consistency throughout the process of transcribing.
Analysis
Data analysis in a grounded theory approach consists of three coding phases: open coding, axial coding and selective coding. The goal of these phases is to analyse the data, break them down, conceptualise them, and put them back together (Strauss & Corbin, 1990). The phases are not necessarily followed in chronological order, but during the open coding phase it is important to stay open-minded and try to break down the data into as many codes as possible. Only after the open coding, the data will be put into concepts and categories in which relations and patterns are found. During the analysis phase all transcriptions were coded one by one in which several codes emerged. With these codes, every transcription was coded again, looking for similarities and opposites. Afterwards the codes were re-structured into broader categories with matching sub-categories that made sense for the sensitising concepts and the structure of the paper. Going back and forth to rearrange existing codes, or labelling forgotten pieces of text, made up the last phase of the analysis, along with extensive memo writing all the way. The final overarching categories were used for the structure of the results, in which the sub-categories fit.
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RESULTS
Vision
Respondents had no problem talking about the founding story of the startup and about the where, when and how of the company. A startup was founded because of a specific pain, business opportunities or a certain vision. But often founders struggled explaining their vision and mission, not being able to clearly articulate this. Respondent L:
“That’s always a bit difficult, because your vision is something that’s very important in your company but I don’t think that – we didn’t start with some sort of shared vision. We started with a common pain. And that has then slowly evolved into a bigger vision I think. One that still stands”.
When probing about the topic, every startup could indicate at least some sort of vision or mission the company stood for, often vague and often more than one. There were several startups that never took the time to write down their vision, simply because they prioritised other business activities. Some mentioned that they must reserve resources which they didn’t have, while startup O didn’t believe in having a clear vision:
“A vision as a definition as in: ‘we want to change the world’ or ‘we want to contribute’. That kind of ‘why’ question, why we do it, is something we didn’t write down, because we do not truly believe in that”.
There was a clear distinction in startups with a vague vision, not taking the time and resources to get something on paper and startups that took the time from the start to articulate a clear and concise vision, mission or idea. Respondent H:
“[When founding the company] we looked at: ‘Why do we do this? Which direction are we heading? What do we want to achieve?’. And that became very clear after a weekend. We want to bring people back into the stores, worldwide. And everything we do is built around that idea”.
With the founders, they sat together to discuss and align their vision, to use it in later stages to make decisions about the company and to use it in their communication efforts.
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Communicating the startups’ vision was actually something every startup believed in, even the startup that chose not to have a clear vision. Everyone saw the value in telling a story and the use of communicating a vision to achieve business goals, mainly to differentiate from existing startups. But respondent L also pointed out the importance to communicate the vision to employees and said that “when you clearly formulate your vision - something that’s backed company-wide - then people can work for something more.”
Some form of vision was apparent in every startup and founders see the benefits of communicating it to both internal and external stakeholders. However, the vision and mission sometime remain vague and are constantly subject to change. Respondents mentioned the need to stay flexible and move along with feedback from both internal and external stakeholders to live up to certain expectations. The vision was never set in stone as respondent J put it:
“So, you just collect a lot of feedback. We think it’s an interactive process. Something that grows over time and sometimes cuts to a certain direction due to certain developments, or trends, or whatever. We always try to establish it that way. We don’t see it as a one-time purchase.”
While respondent O said:
“I believe that it has to be much more dynamic nowadays and that you, that you have to go with the flow or what the market demands [of you]”.
This illustrates that the vision and mission are subject to constant change. Founders, however, argued that their core vision will not change that much. While business goals, mission statements and communication effort might vary over time, the core of the business will remain the same:
“The core idea and the core vision where we believe in and work towards as a company, that is as I said – that hasn’t changed the past two years. And the core, the
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principles we stand for, has remained the same. But how we give substance to that – we are absolutely open to change that.”
Most respondents acknowledged the importance of having a clear vision, but have troubles turning them into consistent communication and/or strategy. Multiple visions can exist for a single startup which are never set in stone, but constantly evolving through both internal and external factors.
Culture
Within all startups there was a limited amount of, or no hierarchy at all. The fact that startups are small and often everyone working in the same room with open and direct contact contributed to this fact. When it comes to decision making, the founders or senior management was often responsible, but that was the only hierarchical thing. Employees had lots of influence in company decision making in the form of weekly meetings, or by simply discussing business goals in small teams. Meetings and democratic decision-making were often mentioned by founders. The founder of P said:
“We hold a quarterly OKR session, which stand for Objective Key Result, in which we determine [together, with all employees] what the goals are for the upcoming quarter. And we always discuss and repeat the mission, the vision, the guiding principles and the culture of the company”.
Apart from the lack of hierarchy, founders explained their startups’ work environment as loose, relaxed, transparent and open. Employees didn’t have strict times to come in and could often leave whenever they want. Respondent N explained that they focussed on output, rather than hours worked. If an employee wanted to work from home, all he or she had to do was let the others know. Founders think that a certain degree of freedom results in a greater sense of responsibility, more creativity and innovation. Respondent I beautifully summed this up as:
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“Of course there are situations in which you realise that there is someone above you, that is of course the CEO. And there are 2 or 3 more people like that. […] Someone HAS to be in the lead, but the others will never experience it like that. That is because of the specific personalities that walk in here. They become part of the team and have so much power, knowledge and talent. So, if you are trying to manage that person, and put them in a hierarchal structure, these talents will never come up with brilliant solutions”.
Communicating the preferred working culture internally was a challenge for founders and they could not clearly indicate whether they were actively communicating certain values in a top-down manner, or whether culture was communicated unconsciously and had room to grow organically. Founders stressed the importance of having certain values within a company and the need for a fit between employees and these values. Founder of startup A explained the concept of “monkeys see, monkeys do” in which new employees would always mirror themselves to the people that already work at the startup. Many the respondents indicated that they didn’t have rules or specific values that they actively communicated to their employees. All of them, even the ones that did have written-down core values for their startup, expressed their preference for an uncontrolled way of communicating the company values: “Whether you are consciously communicating your values, or not. There is no wrong
or right way. I, however, would always prefer an organic way of communicating” Some
mentioned the onboarding process (a standardised process new employees go through when they join a startup) as a phase in which employees could connect with the culture and learn what the atmosphere at a startup is from an “incredibly long email with lots of GIFs,
which is a lot of fun!” To a more standardised process:
“During the intake the first two days that someone joined the company. We clarify everything from our three pillars – so it doesn’t matter to which pillar you belong as a new employee. As a new employee, we get you on board and try to communicate very clearly towards what goal we’re working”.
The results also showed that the hiring process was of crucial impact on a startups’ culture. Within small teams, hiring a new employee has a substantial impact and respondents
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always looked for someone with a great fit in terms of company values, rather than someone’s skillset or recommendations. As respondent X put it:
“[…] that I deem it important that I can have a, whether it’s a man or a woman, good night out with them, so to say. Or just drink a beer with them. I think that is the most important part. It has to be someone like us. I think a certain culture fit is very important. Always”.
Founders often value people that fit their existing and/or preferred culture and often mention teamwork and fitting in the team. As respondent B notes: “[…] But also team spirit. That is
one of the main values we want to create within such a company. Team spirit. […] Or that people really see that they can achieve it together […]”. They note that people need to feel
comfortable and trusted in a group and that they should enjoy working with each other to achieve great performances.
Overall founders were very concerned with the culture at their company and the influence it can have on an employee’s performance. No hierarchy and a high amount of freedom and influence within the company, apparent at every interviewed startup, were used as means to stimulate creativity, motivation and efficiency, but founders also mentioned that this type of work environment isn’t fit for everyone. Core values of the companies in terms of culture were communicated in an unstructured manner and most startups preferred an organic way of growth and communicating the culture among the employees.
Image
Respondents thought in terms of visuals and visual identity when talking about the image of their startup. Startups could indicate certain communication efforts and the message they were trying to get across, but these were limited and most couldn’t indicate how stakeholders perceived their company. Startup C had a general idea of how their company was perceived, while startups G did extensive customer research, to see how their startup
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was perceived. Most founders did stress the need to communicate more and the urge to step forward. The founder from startup C explained:
“We want to push [Company name] forward, much more than we do now. We are currently doing this by writing press releases. […] I think that because of that you can give [Company name] more body. Because it currently remains quite unknown”.
A way of creating this kind of exposure and awareness is with visual material of the startup. Every startup had a visual identity and most of them were actively working on standardising their visuals with a style guide for example. As respondent G said:
“Well we have a style [web]site, because internally we are a bit nerdy. We have a page about copy, a page about logo and colours, a page about images and soon a fourth page about the brand”.
But most founders put little effort in their visual identity, style or logo’s when starting their new business. They often chose to prioritise other business related activities over a well-designed logo or simply didn’t have the right people with the right skills within the company to work on their visual identity. As respondent A puts it:
“Well we had a boy with us who was kind of visual. And then we made a logo, we positioned it a bit and we did our best for that. We used to ask a girl to do it freelance for us, for a couple hundred euros a month. So we were definitely working on it, but it was always our Achilles’ heel. […] We were more concerned with our product - but the commercial side, the brand building, that only came in a later stage.”
Apart from not having the right kind of people, startups often indicated that they prioritised other business activities above the creation of a visual identity or communication efforts to external stakeholders. What became apparent during the interviews is that every startup saw the value of having consistent visuals and messaging and that they were increasingly putting more effort in it as they existed longer. But overall startups indicated that they did too little and that their communication wasn’t as consistent as they would like to be.
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Branding
What became apparent during the interviews is that founders lack a clear understanding of what branding is. Respondents couldn’t clearly articulate what they thought the definition of branding was and answers were often long and vague. Also, there was no consensus on the matter, as all definitions were different and had little to no overlap. Branding was often perceived in a visual manner. Respondent A stated that he considers branding to be very visual. But he also said:
“[…] leaving your mark on certain things. You can leave your mark through a website, or through a signature in your email. It is a mark, which has to reflect what you want to emit as a company.”
And respondent I:
“First, I think that branding is very visual. But it should have certain implications. And I think the Cool Blue’s, the Bol.com’s and the Google’s are very interesting. They are just incredibly good at that. At branding. They are able to connect the visuals to the values they stand for”.
And while specific definitions often remained vague, and founders were struggling with finding the right words, some interesting definitions emerged. Respondent P said:
“For me, branding is the identity that you want your company or product to breathe – and this is a very broad question I think. You want that people start to recognise your brand with certain associations involved. And by these associations people are stimulated, or not. […] So for me, a brand is some sort of coat rack or umbrella under which you operate”.
Respondent O explained that branding was about what other people said about you when you were not in the room and talked about how branding is basically a two-way process:
“In the end people have a certain ‘set of expectations’ about a brand. So branding isn’t really something you posses. It is something you create and that has – people have certain thoughts about it. And expectations. So because it is something in their head, it isn’t something that you can just change”.
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And this two-way process became apparent at more startups when they talked about how developing their brand or their branding efforts was a continuous process, when they were involved in branding activities. Often they hired people to help them with this over the course of months, either to document certain values or to go back to the basics: “Why are we doing
this and what do we want to achieve?” Most of the time the reason to hire external parties
was the lack of knowledge about branding or brand activities within the company.
But not every startup was, at least consciously, working on developing their brand. While every respondent acknowledges the benefits and importance of branding, there were only two startups explicitly stating that they were actively involved with brand building. Others didn’t prioritise it, saying that it’s on their roadmap but not for now. Respondent D stated that they “just don’t spend a lot of time and effort on marketing”, and respondent F saying that it’s on their agenda, but that they will only hire someone to work on it when there is money available. And while it may not be number one priority for the majority of startups, they do stress the importance of branding. Respondent A said that “branding should be taken seriously sooner”, and others talk about how branding is the next big step in their company and that they will “start branding” soon.
Alignment
With only one small question about alignment between the three brand building concepts, answers were limited. Most startups indicated that their vision, culture and image were not aligned and that they could put more effort in aligning them. Examples of consistent communication to internal and external stakeholders were mentioned, as well as a visual identity that matches the values a startup has. It was often noted that there was a certain degree of alignment between vision and culture, or the vision and the image, but no respondent confidently answered that all three concepts were completely aligned. Certain founders indicated that they did find alignment and consistency important:
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“[…] When you are doing more things externally – I think that it’s clear for your communication. That people know where they – it doesn’t even have to be a complete branding guide. It could be a simple A4-paper, in order for people to be on the same page”.
And another that explained the situation they were working to:
“[…] And I think that that is the only way to always communicate your brand in the same fashion. You will never - if we’re done and everything went fine – nobody would ever do something that doesn’t fit the brand. Because the brand is a sum of who we all want to be”.
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DISCUSSION
Startups acknowledge the importance of corporate branding
This study looked at how corporate branding relates to startups and provides insights on how founders and managers of startups are engaged with branding building efforts. The results indicate that founders acknowledged the importance of branding. But when asked about their brand building efforts, founders mainly indicated that they don’t have the resources for it. This is in line with the findings of Ojasalo et al. at SMEs, who found that that they suffered from poorly designed branding goals because of limited time, money and other sources. But mainly because founders did not understand what branding is (2008). This was supported by the findings that founders couldn’t clearly articulate what the definition of branding was and often ended up with explaining how they implemented visuals in their branding strategy. Rode & Vallaster (2005) suggest that entrepreneurs have no clue what corporate branding is, and therefore cannot implement it into their businesses, which is supported in this case. The limited understanding of branding was further highlighted by the fact that founders often described branding in terms of visual design as creating a logo or using a set of colours.
But when asking about the vision, culture and image of a startup, founders provided answers that showed that these concepts were in the process of shaping a corporate identity and corporate brand. None of the founders mentioned these as part of their corporate branding strategy, which again proves that they lack a general understanding of building a corporate branding. This goes to show that what is actually happening at startups, is that founders are unconsciously shaping both their corporate brand and identity, because they are in fact actively engaging with the three concepts of brand building. But it is hard to influence something that is being done unconsciously and founders would greatly benefit from a deeper understand of corporate branding so they can start coordinating brand building
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efforts and implement corporate branding in their overall business strategy. And this is crucial for startups to survive. Bresciani & Eppler (2010) mention that it is risky to not start building a brand from day one. Startups often recognised that they should have, or had wished that they began building their brand in an earlier stage. Even though limitations of prioritisation, money, time and resources, or just knowledge of branding, startups could build a strong foundation by focussing on corporate branding in the earliest stage of their company.
Brand building concepts have different dynamics in startups
VISION
Vision is explained as the central idea behind a startup and that expresses top management’s aspirations. What became apparent during the interviews, however, is that not all respondents could clearly articulate the vision of their startup, or that there were multiple ideas why a startup existed. What is more, is that these aspirations were never set in stone. Multiple respondents mentioned the need to stay flexible and that a startups’ vision was, or needs to be dynamic. Founders were open for feedback for both internal and external stakeholders, which could be an explanation for why founders struggled with communicating their vision: there just isn’t one set vision. It needs to be mentioned that some respondents stated that their core vision never changed that much, but there was only one that could clearly indicate what that vision was.
Overall the vision, mission and goals were subject to substantial change and this might be a considerable challenge for startups when communicating this both internally and externally. This substantial change is in line with Aarts (2009) who states that there is a constant adaptation between internal and external, and formal and informal communication. This is what causes an organisation to constantly move along with its environment. Hatch & Schultz also explain this with their organisational identity dynamics model (2003) in which there is a
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constant conversation going on between culture and identity, and image and identity. The importance of communication about this topic was stressed in terms of founder alignment in order to make well-established business decisions based on the vision. But also in terms of being transparent to employees in communicating business goals, and the relation between company values, work ethics and the vision of the startup. For internal purposes, it is not even that important to write down a vision or mission statement, as the communication is rather open, transparent and direct in small teams. The dynamics, or conversation between culture, image and identity are implicitly communicated, rather than explicitly mentioned. This could never be the case at large corporations in which they need to document and communicate mission statements and company values in a very structured way to their employees.
CULTURE
Startups have a very specific kind of culture. Hatch & Schultz (2008) explained culture partly as something that “manifests itself in the ways employees all through the ranks feel about the company they are working for”. What the results showed is that employees received a certain degree of freedom within a startup. Founders valued pro-active employees and didn’t set strict rules for them. Moreover, meetings were hosted in which employees could ask questions and participate in democratic decision making. Combined with the fact that there is often limited or no hierarchy, employees are equal to founders in a sense and are equally important (if not more) in shaping the culture at a startup. The vision on culture by Hatch & Schultz is approached from a managerial top-down perspective, whereas startup culture is a more fluid process in which unstructured communication shapes the work ethics, values and overall working culture. This liquidity is also mentioned by Aarts (2009) who states that ambitions and interactions are being shaped by the environment in which they take place, resulting in an organisation that is ‘on the move’. The only reason that this is possible, is because the working environment at startups is often loose, relaxed, transparent and open.
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Direct communication is possible because of both the small teams and the limited amount of hierarchy, which wouldn’t be the case in larger corporations with structured communication processes and a clear hierarchy. In startups, everyone knows what is happening in, to and with the company.
But when culture needs to be communicated, to new hires for example during an on boarding process, founders struggle a bit how to tackle the issue. While a fluid understanding of the culture within a startup works for existing employees, when that culture must be documented or written down, founders had think about what exactly is going on within the company. Having certain values within a company was very important for founders and they would always want to communicate this to new employees, but were in favour of letting this grown organically. This again is in line with the organisational identity dynamics model by Hatch & Schultz (2003) and the conception that corporate communication organises organisations and their members to formulate and communicate visions and ideals (Christensen & Cornelissen, 2011). It is an ongoing conversation between internal and external stakeholders, ranging from implicit to explicit communication. Therefore, it is important to hire people that have a shared set of values and fit well into the company in terms of personality and ambition. This way people can cope with the fluidity of the working culture. Because not everyone can cope with the amount of freedom and the lack of hierarchy at a company.
Top-down processes initiated by senior management about communicating culture are not apparent in startups, as there is no need to and it will conflict with the open and loose working environment. In startups there is no real hierarchy, apart from senior management being ultimately responsible for business decisions, but employees would never experience this hierarchy. Culture in startups therefore, must be understood in a fundamentally different way than in SMEs and MCNs. Employees becoming ambassadors of the company they
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work for is too weak as a statement (Harris & De Chernatony, 2001). In startups employees have equal, or together sometimes even more, influence on values, culture and therefore in shaping the corporate brand and identity. This goes even further than the argument of Balmer & Gray (2003) and Bernstein (2003) who ascribe the biggest role of orchestrating and shaping the identity to the founder of a company.
IMAGE
Explained as views of the organisation that are developed by stakeholders. Founders acknowledged the importance of communication to external stakeholders, visual identity and other image building activities, but put little effort in it. In an early stage of a startup, founders prioritised business goals like developing their product or service over creating a consistent visual identity, or communication messages. The longer the startup lasted, the more effort they were willing to put in this type of brand building, as they indicated that they did too little. This illustrates a very linear view that founders have on corporate branding, as they first want to establish their business, and start building their brand afterwards. Founders fail to recognise the possibility, or rather the opportunity, of startups to work on their product, service and corporate brand synchronously.
This linear approach could also be due to the visual understanding of image. Image isn’t just about visuals, but rather the shared ideas, and how a company is viewed by stakeholders. Founders were mainly concerned with external stakeholders and how they literally ‘viewed’ the company in terms of how someone sees a logo and connects it to a certain business. This is a huge opportunity for startups, as you can be consistent from the beginning, as stakeholders don’t have prior thoughts about the company and its brand.
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Corporate branding and identity aren’t set in stone
It seems that existing theories about corporate branding and identity do not fully apply to startups. When looking at the VCI-alignment model by Hatch & Schultz (2009), it can be noted that this is a rather static approach, with all three concepts being in place, equally important to shaping the brand. As can already be seen with culture, the dynamics in startups are a bit different. Culture would most likely have a greater influence than image in earlier stages of identity and brand building, as new founded business often struggle with brand awareness and getting their message out there. An identity in a small startup relies much more on the people working at the company, than how they are perceived by external stakeholders, which is quite different at larger companies that have existed for longer periods of time. There companies have drawn on the influence and feedback of external stakeholders for sometimes years, helping them in constantly shaping their corporate identity and brand slowly over time.
But in startups these dynamics are more fluid, and faster in a sense. Teams are often small, so a new hire or maybe a new founder have substantial impact on the dynamics within a startup. But a reason can also be found of the used definition of a startup. A startup is “in search of a sustainable business model” and sometimes needs to pivot or make changes to reach this goal. Startups go with the flow and move along with market demands. Sometimes founders need to make certain decisions to change directions, whether these changes are drastic or not. And the decisions aren’t just coming from founders. Because the open work environment, employees could come up with creative solutions to specific business problems, something that is only possible in a company with little to no hierarchy and direct contact between employees. All of this goes to show that these processes of building a corporate brand and identity are continuously flowing and ongoing. Within startups, corporate branding and identity aren’t set in stone.
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CONCLUSION
Previous studies on corporate branding mainly focussed on larger corporations like SMEs and MCNs, and research about building a corporate brand within a startup environment was missing. The aim of this research was to explore how known theories about corporate branding and identity relate to startups and see what the dynamics between different brand building concepts were in a startup environment. This was done by taking the concepts of the VCI alignment model by Hatch & Schultz (2008) and asking respondents how these related to their startup, asking questions about branding, vision, culture and image.
The research showed that in general, startups acknowledged the benefits and found branding important, but either chose not to prioritise it or simply lacked time, money or knowledge to engage in branding. These findings suggest that founders do not understand how a corporate brand is built and can never orchestrate the processes involved in brand building. This is in line with Ojasalo et al. (2008) who stated that the interpretation founders have of branding is in general narrow or limited. Founders do not realise is that they are engaged in building a corporate brand every single day. The founders of a startup are mentors of the corporate brand and responsible for the branding efforts, not by hiring a graphic designer to design a simple logo, but by hiring the right employees with the right mind-set and culture fit. By discussing with employees what they think about the mission of the company, what goals they should chase and what they want to achieve. By giving sales pitches, taking on feedback, communicating this to the rest of the team and by keeping everyone up-to-date with the latest company news. If founders would have a deeper academic understanding of corporate branding, they could orchestrate brand building efforts with other business activities synchronously. Not in a linear and chronological fashion in which they first build their product or service, then their brand. Now founders can exploit the
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unique positions startups have in terms of branding by truly building a corporate brand from the ground up.
Furthermore, it can be argued that the existing theories on corporate branding and identity don’t apply for startups. Founders were aware of the brand building concepts vision, culture and image by Hatch & Schultz (2003, 2008, 2009), which is in line with the bigger notion of corporate communication in which these communicative concepts “shape or constitute
organizing as a collective process of sense making and coordination” (Christensen &
Cornelissen, 2011). But the dynamics between the concepts were significantly different. The VCI-alignment model by Hatch & Schultz (2009) is relatively static, whereas in startups the process of shaping the corporate identity is much more fluid. Also, the concept culture plays a much bigger role in shaping the identity of a startup, than it does in the existing theory. Employees (and their onboarding process) have a much larger impact on culture within startups. When working in small teams where communication lines are short and direct and when there is limited to no hierarchy, employees experience more freedom, ownership and with that influence on the different brand building concepts within the company. But they also have to cope with a constant conversation between internal and external stakeholders, and the implicit and explicit communication of a startups’ vision and values. This might be a very good reason for founders to focus on hiring people with the right mindset, rather than the right skillset. These brand building concepts – which are not all equally important! – with their communicative implications all happen at once in a very fluid and dynamic environment, which is the startup environment. This perfectly aligns with Verhoeven who states that all corporate communication activities happen under one banner, where coherence is ensured and where everything occurs all at once (Verhoeven, 2015).
The role of vision, culture and image for brand building and shaping the corporate identity in startups is confirmed. However, these dynamics are different in startups than in SMEs and
