Although I often feel as if I'm over explaining, it turns out that most of the time I don't explain enough. There's probably a larger lesson in there somewhere, but let's avoid learning that for the time being and talk about the Brand Foundation template instead. Honestly, when I posted it, I thought it was self-explanatory. Apparently I was wrong. Several founders have download the template and either used it poorly or sought me out for advice about how to use it because they found it unclear. In retrospect, perhaps the Star Wars theme wasn't the best choice, but I'm not ready to completely grow up yet so that's staying. However, a more thorough explanation of how to construct a Brand Foundation is warranted. Before you continue reading this, be sure to read the original post so you have context.
First of all, set aside a lot of time to build your Brand Foundation. I'd suggest 1/2 day at least. If you have cofounders, you should all do it together as a team. Second, take wording seriously. Words matter. One of my favorite quotes from Ayn Rand's prescient tome Atlas Shrugged comes when hero Francisco D'Anconia tells villain James Taggart, "You ought to discover some day that words have an exact meaning. " In your Brand Foundation, you should agonize over the exact wording of each item. These words will be with you for years to come, and if your Brand Foundation is used properly, then their interpretation will very much matter.
My recommendation is to complete the document in order, from top to bottom. In most cases, you can't complete an item well without having completed the ones above it already. For example, your habits flow from your BHAG, which flows from your Purpose. As a result, the hard stuff is at the top because it is more permanent and has a greater impact, so don't worry: it gets easier.
A NOTE ON TERMINOLOGY
You'll see different companies use the words, "mission," "purpose," "vision," "goal," etc. to mean various things. Don't let that confuse you and don't worry about it--just pay attention to what they mean in the context of this Brand Foundation exercise. If later you want to rename "Purpose" to "Vision" and rename "Habits" to "Mission" or "Goal," or whatever--you can. But at least while you're completing this document, use the words as I'm describing them. [For those paying attention: yes, now would be a good time to throw the Atlas Shrugged quote back in my face.]
The purpose is your big "why?" It should be inspirational not just for you as a founder, but for your future employees, partners, and customers. It's not about your personal financial success or fame. It's not even about being a market leader or having a billion users or building a cool product. It's something that makes you want to get out of bed in the morning; it's big, and it's impactful. Let's look at an example from probably the world's most respected entrepreneur, Elon Musk. The purpose of SpaceX is described as:
To revolutionize space technology, with the ultimate goal of enabling people to live on other planets.
Now that's an inspiring purpose. It's huge, but specific. It's something you could be dedicated to for decades and still feel excitement about. Compare it to this purpose that a founder recently proposed to me:
We believe we can make a successful global scale company, big valuation with just a small team. Just like how whatsapp or viber did it.
Sorry; I fell asleep on my keyboard just then. Can you imagine convincing employees to join you--or persuading potential customers to choose you over an equivalent competitor--if this was your purpose? Imagine your child (or your future child) standing in front of her school class on Career Day: "Damian's daddy dreams about colonizing Mars, but my daddy dreams about building a successful global scale company with a big valuation!" Shut the fuck up, kid, and sit down.
Here's another bad purpose statement. It's a random soup of useless abstractions and uninspiring features. A few phrases could have been used as ingredients for something palatable, but that's like saying that Gallagher could have been preparing a gourmet meal. Make yourself a note: it's hard to inspire people with three separate bullet points and an "80%.":
1. Modernize the equipment rental industry POS software to the 21st century technology to give users anytime/anywhere access.
2. Reduce equipment rental support operations cost by 80% using state of the art technology
3. Provide equipment support guides for the rental customers in the field for on-time completion of the construction related jobs.
A list isn't a purpose statement, and using terms like "state of the art" and "21st century technology" just makes you sound like a lazy consultant. Can you imagine Elon Musk--or Richard Branson, or Steve Jobs, or Mark Zuckerberg, or Bill Gates, or Jack Dorsey, or Name-Your-Successful-Entrepreneur--saying that his or her purpose is to reduce "operations costs by 80%?" Me neither.
Let's again look at Elon Musk's purpose for another company: Tesla Motors:
To accelerate the world's transition to sustainable transport.
Okay, so no planetary colonization here, but still an inspiring purpose. As the founder, part of your job is to communicate your passion and your vision to stakeholders. Don't sound like a worn-out middle manager at a government contractor. Make us dream.
I really don't think I should need to explain what a "Big Hairy Audacious Goal" is. Jim Collins and Jerry Porras, inventors of the term, describe it thusly:
A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines.
The idea is to pick something that could possibly take decades to achieve and that will inspire stakeholders to action. Wikipedia has a good list of examples. Your goal should be "just shy of impossible," which implies really, really big. Note that it must also be something measurable, so that you know when you've hit the goal. The classic example is NASA's goal in the 1960s of "landing a man on the moon and returning him safely to the earth." Conspiracy theorists aside, no one was questioning whether NASA had met its goal on July 20th, 1969: the entire world watched them do it. [Technically they hadn't met the goal until July 24th, when the crew returned safely to Earth.]
Collins and Parsons define four categories of BHAGs: Target Oriented, Competitive, Role Model, and Internal Transformation. If you're interested in more detail, this blog post does a good job of describing them and includes examples of each. One caveat is that I think inspiration is a crucial component, and so I recommend being extremely careful, especially when choosing a Target Oriented goal. Many founders simply use some easily measurable metric--usually a financial one--as a goal. But numbers are almost never inspiring, especially if they're not even your numbers. No one wants to stay up late working "to earn enough money for the founder to afford a private jet. " And however you word it, that's basically how every financial goal sounds to most stakeholders (even the founders).
The authors touch on this issue briefly, but then they go on to praise Walmart's goal to become a $125B company by the year 2000 as an example of a great Target Oriented BHAG. I completely disagree. It's a horrible BHAG. Walmart may have coincidentally met this goal, but I am extremely dubious that the average Walmart employee was ever inspired to work any harder by imagining a $125B market cap for the boss's company. You can almost hear the internal dialogue of the cashiers. "Whatever; I'm still getting paid $5.15 an hour."
Pick a goal that a typical employee can get emotional about. Think of it this way: imagine that you are a player for Blackpool FC. You're out of breath; your legs ache, and your heart is pounding from that last practice drill you ran. You know you should be mustering the energy for the next drill, but you just feel like giving up and collapsing on the grass instead. How motivated will you be to push yourself when your club's BHAG flashes in your mind and it's, "to earn another £10M for Karl Oyston" [Chairman of Blackpool FC]? Not very much, huh? That's why Blackpool FC's goal is to "reach the English Premier League." Achieving this goal will also probably result in more money for Mr. Oyston, but the thought of reaching the English Premier League is a hell of a lot more inspiring if you're the one wearing sweaty shorts.
Your BHAG and your purpose tell you what kind of habits you should strive to instill in your company culture. Think of habits as a set of actions distilled down to only those that are necessary and sufficient to organically achieve your BHAG. In other words, the opposite of these habits recently submitted to me by a founder:
• Continuously improve to build a great product
• Customer [success] focus
• Ready for challenge
Here's a no-brain hint for defining your company habits: use verbs. Habits are actions, so you need verbs to describe them. "Customer [success] focus" is not an action. Neither is "Ready for challenge." [And don't tell me the implied verb there is be; that's one of the few non-action verbs.] "Continuously improve" is a verb phrase, at least, but how does that realistically translate into something actionable that employees can do?
"Hey, you, over there! Don't forget to continuously improve!"
For an example of habits done right, let's look at Zappos. Early on, Tony Hsieh articulated that part of the company's goal was to "build our brand around the best customer service and customer experience." So what habit did he instill to achieve that goal? This one:
We're always listening [to customers] with open and attentive ears
Think about that for a moment. If everyone in the company is always listening to customers, then they're always learning what customers want, need, love, and hate. Eventually, all this listening will ignite empathy, and soon they'll be relating to their customers on a very personal, emotional level. And so customer service is bound to improve. Only a company full of sociopaths would build so deep a connection with its customers just to turn around and treat them like Comcast does. With the right habits, Zappos achieved its goal almost naturally.
Don't think that means you can just write down a bunch of things you want to focus on for the next few months and then call them "habits," like this founder did:
Working on the beta version, thinking how to improve upon the beta, the plans that revolve around finding investors, accelerators, thinking about the possibilities of the startup.
Habits should not just be another way of saying, "do the things that need to get done in the short term. Here--here's a list." They need to be focused actions that will result in the achievement of your long-term BHAG. This founder's habits are completely useless. Should you be working on the beta version, or thinking about how to improve the beta? Or should you be planning how to find investors or get into accelerators? What if everyone worked on the beta version? Well, I guess that means you'd eventually have a beta version. Of something. But then what? Is that your goal? A beta version? Or getting into an accelerator? Imagine Tony Hsieh rallying his employees: "Okay, everyone, we're going to build our brand around the best customer service in the world. Now to do that, let's all sit around and think about the possibilities of the startup!" If that's what Hsieh had done, you'd have never heard of Zappos.
If deriving habits from your BHAG is proving too challenging for you, you can always try the reverse. Pick some habits, and then imagine a company full of people living those habits--without the context of your purpose or BHAG. What would become of this group of people? Over time, would they organically make progress towards your BHAG without even knowing what it is? If the answer isn't, "yes, of course," then go back to the drawing board and pick another set of habits. Lather. Rinse. Repeat.
Values are pretty straightforward. They're what is most important to you. Here's the catch: everything can't be equally important. I don't like when companies list more than 3-5 values, because after that people can't seem to remember them, and if people can't remember them then they become basically useless. So that means that you have to choose the 3-5 that matter most to you.
If it makes you feel any better, just because a value doesn't make your list, that doesn't mean it's not important to you at all; it just means it is less important than the ones that made the list. You might value honesty, for example, but it's down at number six on your list, which means it didn't make the cut. That doesn't mean you're dishonest, it just means that you need to emphasize other values at your company.
So why have values? The short answer is that values guide decisions. You and your employees will constantly have to make decisions: "Do we sell our customer data to Citibank for $10M?" Or perhaps a more subtle example: "Which feature should I implement first, the customer feedback button or the new payment option?" Values can help tell you--and more importantly, everyone else--how to make those decisions. You may be the founder, but you can't make every decision all the time. You need to communicate how decisions are made, and values are one of the ways you do that.
Choosing the right values can be difficult. To make matters worse, many founders have a hard time separating what values really matter to the company's purpose and goals from those that will sound good to other people. They think of values that will impress the press, rather than values that will empower employees to make the right decisions. Don't fall into that trap. If "diversity" isn't actually that important to achieving your BHAG and realizing your purpose, skip it as a value. That doesn't make you a bad person.
Believe it or not, the promise is what your customers are actually buying. I'll probably write a post about this some other time, and entire books have been written about it by people more knowledgable than I. Nevertheless, the promise statement can be templatized into something quite simple. There are several different templates out there, but most of them share the same key elements. You can look them up and use a different one if you'd like, but make sure that whatever you use it includes at least all the elements of the template below:
We are the <category of business> whose <differentiated solution> offers <the customer> <emotional benefit>
Category of business: This is pretty straightforward. Are you a mobile payments business or a transportation business or an online apparel business?
Differentiated solution: This should be a short description--often a short list--of specific attributes of your solution that differentiate you from other solutions and solve a specific problem for your customer. These are the things that make you unique and special.
The customer: Believe it or not, this is what people get wrong most often. Your customer should be a particular archetypal person, not a company or a business category or the general public, or a concatenated list of any of the above. A person. You don't sell anything to "Fortune 500 corporations." You sell to an HR manager frustrated with an inefficient hiring process, or to an IT director looking for mobile security solution for email, or to a working mom who cares about health but doesn't have time enough to prepare dinner for her kids. You also don't sell to "everybody." When you try to sell to everybody, nobody buys.
Many founders have trouble with this one because they have vivid imaginations about all the things their product will do in the future and all the adoring fans it will eventually have. They envision a world in which everybody really will want their amazing new app. Then when they're told that they need to narrow their customer definition down to an archetype, their starting point is "everyone" and they slowly and reluctantly make it more specific. The conversation with these founders usually goes something like this:
Founder: "Everyone is a potential customer for my new Rent-a Pug app!"
Me: "What about people who don't even have smartphones?"
Founder: "Well, not everyone, I guess. Only everyone with a smart phone."
Me: "What about people who don't like pugs or are allergic?"
Founder: "Well, only people who love pugs and have smartphones."
Me: "What about people who have pugs already?"
Founder: "Well, only people with smartphones who love pugs but don't have one."
Me: "What about people in rural areas that are too far away?"
And so on. Instead of starting with an entire universe of customers and trying to narrow down your customer definition, I suggest the opposite approach. Start with a single person. Literally. Find one real person who actually loves your product because it solves a specific problem. Your best, favorite customer. And then simply describe that customer. You'll start with "Rick Gonzalez," and end up with something like, "thirty-something urban professional males who love pugs but live in apartments where pets aren't allowed and who want to bring small dogs to the park on Saturday afternoons in an effort to spark conversations with single women who also like small dogs." Or something like that. You're trying to define your optimal customer, so get specific.
Emotional benefit: Many founders have trouble with this one as well, possibly for no reason other than it's not just about a rational benefit, but one which also evokes an aspirational emotion. Imagine how your product will make your customer feel, and describe the benefit in a way that will communicate that feeling. I can't help but think of a series of old television commercials for Sure deodorant. Proctor & Gamble's slogan for the product was, "Raise your hand if you're Sure!" The commercials featured people stuck on trains and on crowded elevators in awkward positions with their armpits inches from the faces (and noses) of others. Users of Sure deodorant had confidence because they knew that their armpits smelled fresh and clean. Those who didn't use Sure were afraid to lift their arms for fear of exposing others to their supposedly dreadful body odor.
So Sure's emotional benefit would have been something like, "the confidence that comes from knowing you'll never have body odor." This isn't a marketing slogan that you're trying to construct here (see below), but it should reference the emotional reasons for using your product, not just the intellectual ones.
The promise is basically a positioning statement, but I think it's important to call it a "promise" because it reminds you that these aren't empty words, but rather a binding contract with your future customers about what you intend to provide. Although I reference an advertising campaign in the last example, the promise is NOT a tag line or a marketing slogan or any kind of customer-focused messaging. It's an internal, factual, foundational statement upon which all of your marketing and messaging will be built. Thus its inclusion in the Brand Foundation.
The last element of your Brand Foundation is the persona. Once you've defined your values, purpose, and habits, defining your persona should be relatively easy. Think of your company as a person. The persona is how you would describe that person to someone else. Is s/he intellectual, goofy, stylish, brooding, angry, strong, caring, wild, etc.? It includes your voice; what words you use and the style of how you use them. Do you swear? Do you use slang? How extensive is your vocabulary? Are you colorful and descriptive, or matter-of-fact?
Your persona also includes your character; what things do you love and what things you hate; what your interests and habits are; what causes do you support or actions do you take? Are you serious? Funny? Flirty? Stodgy? Many companies even choose a gender, and some take the fantasy as far as defining what kind of car the persona drives, where s/he gets coffee, and what kind of clothes s/he buys. Your persona will be constantly referenced by your marketing team, and every single external communication will first pass through your "persona" filter to ensure that you speak and act consistently.
After all this writing, it seemed like I should have a section at the end titled, "conclusion," so here it is. I can't emphasize enough how important the Brand Foundation can be for your company. It will be with you for years to come and it will be an invaluable guide for many, many decisions, both small and large. It is important to remember, however, that in the super early stages when you're still working on customer development and testing basic product/market assumptions, some elements of the Brand Foundation may need to change. That's okay, but you should lock it down as early as is feasible and then leave it alone after that.
Now, stop playing around on the Internet and go build your company!