Successful companies tell their story effectively, but they also have a substantive story to tell.
27 Jun, 2017HBR.ORG
In the fall of 2014, in the midst of controversy about Facebook’s real-name policy and selling of user data, a new social media platform called Ello caught fire. Ello vowed to forever be free of advertising, and its company manifesto boldly concluded with a promise to would-be users that “You are not a product.” The timing couldn’t have been more perfect. The media dubbed Ello the “Anti-Facebook” and, at its peak, the social network was getting membership requests from more than 30,000 new users per hour.
This enviable opportunity quickly turned sour, however. Recently launched by a few designers and developers in Vermont, Ello was not equipped to handle such a high level of traffic, resulting in a bad experience for some users. Furthermore, the site was still bare bones and many users who came expecting similar features to Facebook were disappointed. Ultimately, Ello’s success didn’t last long. Though the site lives on as a network for artists and creators, most of the users who came hoping for an alternative to Facebook quickly left.
Ello’s story shows what can happen when a startup achieves media success that outpaces its progress in other areas. While some founders suffer from a naïve “If you build it, they will come” attitude, many others swing to the opposite extreme. Tempted by the allure of media exposure, they seek it out before they’re ready. Case in point: Elizabeth Holmes at Theranos, who chased TED talks, New Yorker profiles, and Fortune covers before her company’s core technology even worked (and then apparently lied about it when the exaggerations caught up with her).
While Theranos may be an extreme example, most founders would give an arm for similar (and similarly fawning) media coverage. They know publicity can be an important early signal of a business’s progress, helping attract the customers, partners, employees, and investors the company needs to take off.
Research backs this up: one study of technology startups found that more coverage in industry media early in a company’s development was associated with receiving greater levels of venture capital funding later. We studied 60 venture-capital-backed companies and found that those that eventually achieved successful outcomes for investors tended to attract more media coverage along the way. Successful companies had more articles and headlines written about them, were covered by more publications, and put out more press releases than failing ventures.
While the research showing a connection between media coverage and startup success might send entrepreneurs scrambling to pour time and money into their communications strategy, the lesson is not that simple. Communication is a critical part of building a business, but media attention must be driven by real growth and traction in core areas. That sounds obvious, but it’s something too many founders overlook, both in their urgency to attract publicity too soon and in their anxiety for that coverage to be positive. When founders drive media coverage too early, they may not be able to deliver on their promises to customers. Moreover, fretting about positive publicity may be wasted energy, according to our research.
In our study, a higher percentage of the media coverage garnered by successful companies was negative – 4.5% compared to 2.6% for failed companies. This doesn’t mean that “All press is good press,” but that press is a good sign your company is successful enough to attract newsworthy, skeptical coverage that goes beyond PR puff pieces. For example, Uber’s recent troubles around sexism and treatment of drivers wouldn’t be worth mentioning if it wasn’t the leader in its industry.
One of the first things new entrepreneurs do is craft a clear story about their company, why it was founded, and what its goals are. This lays the groundwork for attracting and motivating a team, developing company strategy, and pitching to customers and investors. It’s also the first step in building your media approach, but it’s important not to get distracted by storytelling if you haven’t worked out important operational, logistical, or business model issues.
The best time to seek publicity is when your company demonstrates traction or hits a key milestone, such as acquiring a new client or launching a product. Focus on reaching the company’s goals, and then promote these successes once you achieve them. When you do get media attention, share it widely and make sure key stakeholders (investors, partners, etc.) see it. Don’t stress too much about negative press coverage, since it shows that a company is newsworthy enough that its failures deserve attention.
Another important tip for early-stage startups: don’t waste money on a public relations firm or staffer. The ones who can really help you are too expensive, and those offering free or reduced-price PR should be avoided. If, however, you have access to the communications office at your university, accelerator program, or other institution, this can be a great way to get free publicity. But ultimately nobody is better at telling your story in the early days than you are.
While every company needs a media strategy to create awareness and demonstrate traction, it’s only one piece of the puzzle. Media activity should complement and keep pace with the rest of a company’s growth, or it risks creating an image that reality can’t live up to. Successful companies tell their story effectively, but they also have a substantive story to tell.
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