Why Day-One Branding is Make-or-Break for Startups

Digital transformation, constantly shifting markets, and increasingly specialized sectors continue to increase the number of startups.

Despite this momentum, according to the US Bureau of Labor Statistics, across nearly all sectors, 10% of new companies don't survive their first year, and another 70% fail between their second and fifth year.

Mexico tells a similar story. According to current data from the Center for Business Competitiveness Development, INEGI, and the Mexican Entrepreneurs Association (ASEM), 75% of Mexican startups close their doors within the first two  years, and 90% fail before reaching 10 years of operations.

Regardless of geography, startups share several common failure points, the most significant of which are:

• Lack of planning and strategic clarity
• Poor implementation of marketing strategies
• Cash flow problems and difficulty securing funding
• Insufficient market knowledge
• Product doesn't deliver market value
• Poor business management
• Inability to adapt to market demands

Lack of strategic planning is one of the biggest problems and priorities for 2025, according to ASEM, affecting both startups and established companies.

Sad but true: Most startups are born with limited resources and operate with a survival mentality. They are constantly "putting out fires" and view planning as a luxury for later. This brings with it a lack of vision. What's the result? Many of those things we just mentioned.

This brings us to the question: Which basket should we put our eggs in?

When launching a project, it's easy to focus all attention on the product or sales. However, brand is what will help build a substantial path by understanding and connecting with audiences to create emotional bonds that go beyond features.

In this context, brand plays a key but perhaps underappreciated role.

Some people seek to invest in brand from the project's inception, but they confuse it with disciplines like design and marketing. Nothing could be further from the truth.

In other cases, investing in branding isn't considered relevant until certain business milestones are reached, or it's viewed as an expense.

Sound familiar? If so, keep reading — you may find this useful.

A brand is a strategic resource that can help bring clarity and momentum to your business from the moment you plant the seed of your idea.

Let's debunk the myth that you need a complete brand from the beginning and see how we can establish coherence and long-term meaning with fewer resources.

Let's dive into the main stages of a startup and how brand can support each one.

Stage 1: Seed

This is the foundational phase where the startup transforms the idea into something real and seeks to validate that there's a market willing to pay for the solution to move forward.

For this to happen, we need:

• Business hypothesis validation
• MVP (Minimum Viable Product) development
• Product-Market Fit search
• Creation of first metrics and KPIs

In this initial stage, the brand provides support for the initial impact. Internally, it clarifies and directs our idea and its first interactions. Externally, it generates credibility and differentiation from day one.

While this is a testing and validation phase, it must be done clearly and decisively regarding the position the brand seeks to occupy and the value it will deliver. A clear message can be the difference between landing a meeting with an investor or getting lost in a list of product features.

It's about defining the basic brand elements and its essence — value proposition, purpose, brief narrative, values — to capture the right meaning and value.

The brand will help us:

• Convey the right vision, value, and messages in the pitch
• Make it easier to build the MVP from attributes connected to the Brand, projecting coherence in user experience
• Connect the value proposition with audience needs. It's not just about a product.

Brand will help us map out scenarios and actions for how the brand will interact with its environment and audiences at touchpoints. This will help us project clarity and certainty.

Keep in mind that, as this is the first stage, some research is required to establish these elements on a solid foundation. It's a validation stage, yes, but that doesn't mean it should be a staging of whims or "I want to be..." or "I think that...".
It's a starting point to evolve from, but with coherence.

Stage 2: Early Stage

In this stage, the focus shifts to growing the customer base and the model's efficiency in the market, talent acquisition, etc. To do so, you must know who you are and what people can expect from you.

Today, a person receives over 3,000 impressions per day (visual, verbal, audio, among others). How do we compete and position ourselves in this context?

This is a stage that will demand more from the business, and the brand's presence and contribution will become noticeable if it has been nurtured correctly.

For this stage, we need to have the brand strategy defined, and can take a step further toward defining expression elements such as:

• Naming
• Visual identity
• Tone of voice
• Main touchpoints activated

Every business and brand is unique. Depending on the context and objectives, it's advisable to prioritize the resources that will best propel us forward, rather than trying to use them all.

You might think there are too many elements to define, and that they're beyond your reach. At Naoz, we sometimes prioritize breadth over depth (again, everything depends on the brand's nature), We focus on the essentials to convey the brand's value initially, with the possibility to evolve in the future as feasible. It's about quality over quantity. It's about coherence toward objectives.

With some of these resources clearly aligned with the strategy, the brand can solidly navigate new challenges:

• Accelerate customer acquisition by reducing cost and time because customers know what to expect from the brand, which facilitates market recognition.
• Facilitate funding rounds by demonstrating a coherent proposition, clear direction, differentiation from the market and competitors, and more than just a product. The brand knows how and where to evolve in the future.
• Build and consolidate perception of those aspects beyond the tangible, such as culture, values, and behaviors. This should not degrade when scaling.
• Hire and attract talent that identifies and aligns with the culture we seek to build.
• Establish strategic partnerships that are coherent with the defined Brand Strategy.

Generally, shortcuts are sought at this stage: not investing in the brand, but in marketing, design, or even sales. However, if there's no solid brand foundation, no internal alignment, and no defined identity, then: What story is being told externally? What resources do these areas use to talk about the brand?

Stage 3: Growth and Scale

At this point, the startup is more established, seeking to consolidate in the market, expand to new segments, optimize profitability, diversify the portfolio, etc. To do so, it must build on and solidify the resources developed in previous stages, possibly creating new ones:

Consolidate positioning in the industry: What allowed us to present the brand and define its position in previous stages now establishes a foundation for continued growth and expansion into other markets, geographies, and segments while staying true to our identity. This will also help build a portfolio aligned with our brand.

Internal Brand Culture program: Reinforces the development of employer branding and how employees connect with the brand. Improves turnover rates and builds unity and coherence, especially when there is more than one office.

Brand management and measurement system: If we don't measure it, we can't improve it. The brand is a continuously evolving asset. It would be beneficial to create tools that help us understand how the brand aligns with our objectives, how it's perceived, how coherent we are, and where we need to reinforce and adjust in order to continue evolving.

Identity expression system: Building guidelines and a complete system helps us better express the brand and continue growing. While Visual Identity is practically indispensable, other elements can reinforce value and differentiation, such as Verbal Identity, Sound Identity (which has become more relevant lately), and Smell Identity. The key is knowing how they'll articulate at each touchpoint.

As we've seen, the brand plays a key role at each stage and accompanies the business through contextual challenges. Each defined resource and element provides clarity and direction, and can evolve until it is consolidated in the growth and scale stage.

Whether you like it or not, you have a brand from your first pitch.

Brand Sprint: Creating Agile Brands

At Naoz, we developed the Brand Sprint Program, a specific methodology for building brands for startups. It allows us to define your brand with you and get you to market in weeks, not months, with a coherent brand DNA.

To wrap up, avoid these mistakes:

• Seeing the brand as a luxury, a complement, or a decoration. If you see it this way, you're missing part of the picture.
• Don't wait to invest in your brand until you've completed certain milestones; do it little by little. Consistency and coherence are key. Prioritize quality over quantity.
• Marketing and your logo are not the brand; they're just expressions of it.

Emanuel Westdorp is Founder of Naoz, a branding and strategy company, and Principal Brand Strategist. Transforming brands that drive business growth.