Interview with Al Ries on Startups Marketing

Saeed Choobani
Interview with Al Ries

Al Ries is one of the main theoreticians of  “Brand Positioning”. His Books has been sold more than 3 million copies all over the world and Since 1950 he has consulted many Brands, which were just some unknown names in those times. The interview with Al Ries was an amazing experience, We had the chance to talk to him about Startups Marketing. In the 9th decade of his life, he passionately shares his experiences and ideas. Before reading this interview with Al Ries, I also invite you to read Five valuable lessons I learned from Al Ries by Toomaj F. Bungs.

You’ve been in contact with many Startups through time. You’ve been consulting them since the phrase wasn’t even known by many. In general, How has your experience been with them?

We have worked with two kinds of startups. (1) The first kind is a totally new startup with little or no experience in marketing its product or service. (2) The second kind is the startup that does have some experience in marketing.
We have been much more successful with the second kind, the startup that has had some marketing experience, good and bad. We have had success in making the changes necessary for the startup to succeed.
The problem of working with a startup that has no experience is that our advice is just “our opinions.” And the client has their opinions. That makes it difficult for them to accept our advice if it differs from their opinions.
When a startup has some experience, we base our advice on that experience, pointing out the reasons for their successes or their failures—and then encouraging the client to make the changes necessary for them to succeed.

In your opinion, what’s the most significant difference in marketing for Startups and old-school companies?

Old-school companies are locked into their names and their marketing strategies. If the company is not succeeding, it’s difficult to make the necessary changes. What changes could we suggest for General Electric whose sales have fallen in the last ten years from $187.5 billion (and profits of $17.4 billion) in the year 2009 to sales of $95.2 billion (and losses of $5.4 billion) in the year 2019?
Startups have the advantage of not being locked into their existing names or their existing marketing strategies.

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Early-stage startups face a long period of trial and error before reaching a final product. Many even fail before this and never find the pain points of their target markets. In your opinion, what’s the position of Branding in this process? When should startups begin thinking about brand positioning?

It’s helpful to keep in mind that marketing has two phases, strategy and communications. The strategy takes place inside the company, and communications (also known as Branding) takes place outside the company.
The strategy is far more important than communications. A startup needs to develop a name and a positioning concept before starting a branding (or communications) program.

Startups can rise because they’re innovative and flexible. But do you think if they can compete with established brands just by a “Better product.” How can they beat the socks off well-known brands?

That’s the biggest mistake a startup can make. Trying to be better than established brands.
What do consumers think when they go to buy something like ketchup?
I want to buy the best brand, but I’m only one person. Thousands of people will be buying ketchup, and most of these people will be buying the Heinz brand.
If most people buy Heinz, it must be the best brand. Because everybody knows the best brand wins in the marketplace.
If your brand is not the leader in its category, you can’t run a marketing program by claiming that your brand is better.
Prospects will think: How can that be true? If your brand is better, then how come it’s not the leader? Because everybody knows the best brand wins in the marketplace.
You can’t win by being better. You can only win by being different.
Take Red Bull, the first energy-drink brand. After the brand was introduced in America, there were more than 1,000 other energy-drink brands introduced, almost all of them in the small 8.4-oz. can pioneer by Red Bull.
Except for Monster, which came in a 16-oz. can.
Today Red Bull and Monster dominate the energy-drink category in the American market with about 80 percent of the total market.
Surely some of those 1,000 other brands that came in 8.4-oz. cans were better than Red Bull. But that makes no difference. Consumers assumed Red Bull was better because it was the leader.
And Monster was a good alternative because it was different.

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We’ve seen many times that startups pass every border to be seen and attract users. In recent years methods like “Taboo Marketing” have been viral. How should startups discover the trade-off between getting famous and Branding?

Being famous and being successful can be two different things. General Motors and its seven brands (Saturn, Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac, and GMC) were famous in the year 2009, but that didn’t keep the company from going bankrupt.
Kodak was famous in the year 2012, but that didn’t keep the company from going bankrupt.
To become successful, a startup needs a good strategy. Initially, a startup has two choices: (1) It can become the first brand in a new category, like the iPhone, the first smartphone, or (2) It can be different than the leader in an existing category, like Monster.
Apple introduced the first smartphone, the iPhone, in the year 2007. And the iPhone was the market leader from 2007 to 2011.
In the year 2011, Samsung introduced the Galaxy Note with a 5.3-inch screen, 51 percent larger than the iPhone’s 3.5-inch.
The following year, 2012, Samsung became the market leader and has been the smartphone market leader since then.
It wasn’t until the year 2014 that Apple finally introduced a larger-screen iPhone to match the size of Samsung’s smartphones. That was way too late for Apple to re-capture its leadership.
Samsung won by being different. Not by being better.

Apple changed its name from “Apple Computer” to “Apple” with your advice. Do you think picking the right names is essential for startups? Can’t an excellent service with a lousy name win the market?

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The only chance for an excellent service to succeed with a lousy name is to be “first in a new category.”
If a startup needs to compete in an existing market, its brand name is extremely important. Hopefully, the name suggests the position of the brand, like Monster, in energy drinks.

As the startups’ ecosystem continued growing, new professions also emerged. Among all, Growth Hacking made a “Hype” recently. What do you think an expert marketer can provide a startup with, which a growth hacker -Or similar titles- can’t?

Years ago, most new brands needed expensive advertising to become successful. Thanks to the Internet, that’s not true today. A startup can become successful by using inexpensive PR techniques, which you can call “growth hacking.” Almost every new brand today uses those techniques.

If you wanted to give one and only one advice to Startups, what would it be?

Be first in a new category.
Tesla was the first electric-vehicle brand.
Red Bull was the first energy-drink brand.
Gatorade was the first sports-drink brand.
McDonald’s was the first hamburger chain.
Bird’s Eye was the first frozen-vegetable brand.
Kleenex was the first pocket-tissue brand.
Carnation was the first evaporated-milk brand.
Jell-O was the first gelatin-dessert brand.
Campbell’s was the first canned-soup brand.
Colgate was the first toothpaste brand.
Swan’s Down was the first cake-flour brand.
Lipton was the first packaged-tea brand.
Coca-Cola was the first cola brand.
Heinz was the first ketchup brand.

Thank you, dear Al, for your time.

Saeed Choobani

Saeed is a Data Analyst who is interested in following marketing insights of the startups. His focus is on gathering the best marketing resources for the startups in our blog. Saeed speaks four languages, and like other people of ARDOXSO, he has lived in more than one country and is therefore familiar with different cultures. He studied IT in the past and he is currently completing his studies on Data Science and Business Informatics. If you want to post your articles in order to be published in our weekly blog or if you want to be in touch with him, you can find Saeed on Linkedin or send him an email.

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