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November 30, 2023
Kip Knight

Brand on a Budget - Winning Strategies for Startup Success by Kip Knight

Brand on a Budget - Winning Strategies for Startup Success by Kip Knight

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Show Notes

Mudassir (00:00.561)
He paused these.

Kip Knight (00:02.188)
Alright, one last thing. How do you pronounce your name?

Mudassir (00:05.269)
Give it a try. I'll let you know if that's right or not. Perfect. Perfectly fine. Yeah. Awesome. I think we're rolling. Okay. Please do a clap for me.

Kip Knight (00:08.395)
Mood is here? Okay.

Mudassir (00:20.421)
Awesome, thank you for that. It's not a gimmick. Like people think that we just do it for fun. This actually helps us in syncing the audio and video later on. So the moment you clap, the moment the sound produces. So yeah, it's that. Okay, ready when you are, sir.

Kip Knight (00:33.494)
I'm ready. Let's go.

Mudassir (00:36.113)
Awesome. Hey, Kip. Welcome to the show. How are you doing, sir?

Kip Knight (00:39.79)
Thanks for having us here, I'm doing great. It's going into the holidays. It should be a great conversation here, I hope.

Mudassir (00:46.385)
Yeah, awesome. We're looking forward to this particular chat for some time now. So every single time I host anybody on the podcast, one of the first question that I ask anybody is the context of their life. Like who they are, who we are, how did you end up here, like whatever you're doing today, we're gonna talk about that as well. So give us the earliest context of your life. Who is Kip Knight?

Kip Knight (01:09.65)
Well, it's a fun way to start. I've got one of the craziest career paths of anybody I know. I've worked in seven different categories in over 65 different countries. I'm originally from Louisiana. And so having grown up in Louisiana, got exposed early on to multiple cultures, like the French and Cajun cultures, and the Creoles, and the English. And I think from the very start there, I was...

just curious about the world and curious about how things worked. Um, and it's, it's been fun in that, um, I've been able to take a lot of the lessons from the different categories and the different companies I've worked with and taking that skillset and applied it to the next one. So one of the messages to the audience today is going to be, um, based on the title of a book I wrote called learn to leap, how leaders turn risk into opportunity. Um,

especially for entrepreneurs. I know a lot of your audience are startups and entrepreneurs. Um, my philosophy is, um, sometimes you win, sometimes you learn. Uh, so even if it doesn't work out and you've had success in your own life in terms of startups, you've also had some things that didn't work out quite the way you hoped, but it's the failures that I've learned the most from. And the attitude that

Mudassir (02:29.033)

Kip Knight (02:34.446)
I would hope to share during this conversation would be not if you won or lost, but what did you learn? And how do you apply that to the next opportunity that you're looking at? And that's been my career. It's just been a roller coaster ride of some successes, some failures, but a lot of learning and a lot of excitement about what's coming around the bend because you knew, I know that, you know, based on all the experiences I've had to date, I'm gonna be able to apply a lot of those lessons to whatever I'm gonna face next.

Mudassir (03:04.105)
What did you learn? If you can summarize that into a couple of sentences, what would you say?

Kip Knight (03:09.718)
In terms of my life?

Mudassir (03:11.591)

Kip Knight (03:12.79)
No, okay. Well, hopefully a good husband, a good father, a good work colleague, a good team leader, an innovator and someone who hopefully made the world a little bit better place in the way I've had.

Mudassir (03:29.921)
Okay, awesome. All right, so I wanted to position this entire conversation towards marketing, brand building, that kind of a thing, because that's your forte. So before I dive deep into any of the things, what exactly is a brand? I wanna ask you this question because as an expert, what is a brand? Is it a logo? Is it a slogan? Is it people? So what exactly is it?

Kip Knight (03:58.478)
I can give you a real simple answer. It's one word, it's trust. Brand equals trust. I'm quoting Steve Jobs on that. But if you think about the brands that you love, do you trust them? Yes or no? How much? Do you trust them a lot or a little?

Mudassir (04:08.741)
Mm-hmm. Yep. Yeah, I think so, yeah.

Mudassir (04:18.699)
I think, like we trust...

Mudassir (04:37.469)
Yeah, sorry about that. He's two years old and it's a mess. Okay, so I'm gonna go back to.

Kip Knight (04:45.514)
I've got a five-year-old and a two-year-old grandson, so I'm with you there. It's worth it, trust me. It's worth it.

Mudassir (04:49.893)
Yeah. Okay, everybody's telling me the same thing, but yeah, sometimes.

Kip Knight (04:55.314)
It's worth it. Hey, in there, don't give up. It's worth it. All right. So anyway, we're talking about brand, we're talking about trust.

Mudassir (04:59.389)
Awesome. Yeah, please continue.

Kip Knight (05:04.17)
Yeah, so why do I say brand equal trust? Think about the brands you do not like, or maybe a brand that you used to like or use and now you don't. My bet would be they violated your trust. They made some kind of a promise they didn't keep. And the thing about branding is to your earlier, you know, potential answer is a logo or is it a design or whatever. Those are simply representations of the brand.

But the brand at the end of the day is the collective sum of how people feel about that service or product that is branded. It's the sum of the good, the bad, and the ugly. And guess what? It's a million different interpretations of that brand because if I love a brand and you hate a brand, then those are both perfectly valid. And the challenge for anyone who's trying to create a brand

is to be very thoughtful in the very beginning as to who is your strategic target? What is the key benefit? What is the insight that you're trying to build off of in terms of that brand? What is the benefit you're making to that target? Why should they believe you? What is the tone and persona of the brand? What are the key messages that you want to reinforce and which channels are you going to use and then how do you evaluate success? And the last thought on branding, we can go a little bit deeper on any of these is

Marketers have the dual challenge of building sales overnight and a brand over time. What I see way too many startups doing is they are so focused on hitting that number for the week or the quarter or the year that they don't put enough into the what I call brand bank so that they've got some long-term equity that they can leverage in the future with that customer base that they're building. Financially, the way to think about it is your sales are going to be your P&L.

but your brand equity is gonna be your balance sheet. And if there is anything to measure the value of marketing, I would argue look at the goodwill statement on a lot of brands out there or a lot of businesses. And that is in essence, the value of the brand. And those companies that do it well, build goodwill and the balance sheet over time. And those that don't, you know, really suffer.

Mudassir (07:23.565)
Yeah, yeah. So you work with some of the biggest corporations of generations, like I want to say your time, my time as well. Like Pepsi, I think eBay, Taco Bell, like the big, big names. So in terms of branding, in terms of marketing, so it's a two-part question. So first I want to know, like, what's the difference between marketing and building a brand? So how would you differentiate between the two? And the second question would be, of all these big companies,

Kip Knight (07:36.045)

Mudassir (07:52.861)
Like, you know, if you take out Pepsi's logo, if you take out Coke's logo, at the end of the day, it's just a carbonated drink. It's carbonated water. That's what they're selling, right? How come these companies, they make it so big? Like, how come Pepsi become the Pepsi that we know today? I mean, they're selling a very simple thing. Anybody could replicate that. Okay, like, maybe it's a recipe or whatever. Anybody could replicate that, but I genuinely wanna know, like, how...

how did they end up becoming this mega corporation, a multinational, how did they do that?

Kip Knight (08:25.898)
Okay, let's break it down into two questions. The first one is, what's the difference between marketing and building a brand? Well, they're joined at the hip. You're not gonna get one without the other. Grade brands are never accidents. Brands do not fall out of the sky. Brands are a result of typically a founder who's got a strong passion and a vision for something, and they work really hard to identify all the things I talked about earlier. Who is our target?

What are the insights of that target? What is the benefit we're promising that target? how do we get the target to believe that we can actually do that better than anybody else and One other key to all of this branding work is consistency They do not change what they're all about You know if you think about the big brands that you just mentioned and you went back in time and studied them You would I bet see a through line a very consistent messaging and targeting

And all the various elements of branding, you know, the logo, the colors, the typography, the tone of the messaging, you know, think about, I just rattle off a couple of brands like McDonald's or BMW or Adobe or IBM or Apple or Uber, you know, your mind instantly will just flash, flash a certain collection of images. And it's important that remains consistent because one of the best ways to destroy a brand...

Mudassir (09:46.587)

Kip Knight (09:53.25)
And I would argue Twitter is now known as X and the process of being a case study on that is just confuse the heck out of your listeners and your customers and destroy the trust that people have worked so hard to build up over time. So that was the first question. The second question is, how do you go from a small brand to a big brand? I'll tell you a couple of keys to that. First, what I just said.

strategic approach which is consistent over time and you're putting brand equity in the bank on a regular basis so that you're not getting big overnight, you're getting big over time and consistently over time. The difference between a large successful brand and a fat is just that these brands that are here today and gone tomorrow don't have a lot of

I mean, they're just straight up and then straight down because they didn't have anything that was consistent or meaningful to that target. The other thing that as a marketer, I've always had a lot of passion for is you've got to invest in brands. There's always this ongoing debate between performance marketing and brand marketing, but it's not either or. You've got to continue to make sure that you're doing something other than.

discounting or promotions or something that's very tactical that anybody could do. What are you doing that's unique to your brand that's going to make your brand more emotionally connected to that target audience? Because the one thing a lot of people assume, but they're wrong is people make logical buying decisions. It doesn't matter if I'm talking B2C or B2B. If you really dig down into it,

Mudassir (11:35.11)

Kip Knight (11:37.322)
You know, the vast majority of decisions are emotional in nature. They're not logical. You're not Mr. Spock analyzing all the data and making the correct choice. You're, you're more like Captain Kirk, like, you know, just, I've got this feeling for this and I want to, you know, I want to go buy this new car. Why? Well, it gets, you know, this kind of mileage or it goes from zero to 60 this quickly, that's all who we, what they're really trying to do is it's saying something about me as a person.

how cool I am or how hip I am and therefore I want to be associated with that. So make the investment, understand you're building emotional relationships and never ever stop trying to understand how the consumer is thinking and feeling and acting regarding your brand. The mantra at Procter where I spent the first 10 years of my life was listen and respond to the voice of the customer and where businesses and brands get in trouble is they stop listening.

and time moves on and they become irrelevant and then it's too late. So you've got to do all these things. Branding is, I think, I don't think I know, is the most important function of a marketer because if you're not doing a great job building your brand as the leader of the marketing function, you are failing that company both in the short term.

Mudassir (12:54.509)
What a great answer to that. Okay, so just want to touch one thing which you mentioned with Twitter and now X-Switch. It's a funny name. So I had a question originally planned out for you. So like why some founders have a bigger brand than the companies they own, the companies they're on. So the example that I had in mind was Elon Musk. So Elon's brand is like way bigger than Tesla, SpaceX.

now Twitter maybe combined, like, you know, he's probably bigger than all of them. So the question that I want to ask you is, why do you think Elon has done that? Why in your opinion, from a marketing standpoint, how damaging is it?

Kip Knight (13:41.634)
Well, I think if you listen to shareholders at Tesla, it's very damaging because, well, let's compare and contrast Steve Jobs and Elon Musk. And again, Elon, I admire a lot of what he's done. I mean, he is an innovator. He's tenacious. I mean, when you read about what he went through to get Tesla to go from where it was to where it is, that's the American story. You can't help but admire it.

Mudassir (13:53.29)
Are you pleased with that?

Kip Knight (14:11.346)
SpaceX and what he's doing with some of the medical research. You know, with all due respect, I think with Twitter, he probably got a bit distracted and it's a bit like a

black hole. It's just sucking in all the available money and energy these got. And I don't know the guy at all, but I suspect if you got him to do secret confessions, he'd go, you know, in retrospect, it probably would have been better off to leave that one alone and focus on all the other things I'm doing. In contrast, let's look at what Steve Jobs did. Steve was always looking at what was the best long-term interest of Apple, which he dearly loved. And

Um, I frankly can't think of a situation in which he did something that was going to hurt the Apple brand, if anything, uh, you know, he had an Eagle like anybody else, but I think he wanted to shine the light from him over to Apple and, and also to Pixar when he had that and, and make that part of the excitement, part of the passion and, and the way I would think about it, he was the brand spokesperson and so if it works well, you've got somebody who you can look at.

and have a lot of admiration for in terms of who they are and what their values are and what they stand for. And that hopefully is going to be consistent with what the brand stands for. Where you get in trouble is when the brand stands for something and then the spokesperson or even the founder is doing something opposite of that. Remember, you're too young, but you know, DeLorean, the car featured in Back to the Future, that was a fantastic product on a great potential

Mudassir (15:49.418)

Kip Knight (15:54.122)
had drug problems and financial issues and eventually got busted by the FBI. And I'm a big fan of history. And if you read what happened there, there was an opportunity for that to be a multi-billion dollar legacy brand, and yet it all went up in smoke after a couple of years. So brands are delicate, brands are not guaranteed, brands come and go.

And founders can either be the best thing that ever happened to a brand or they can be the absolute destroyer.

Mudassir (16:27.893)
One thing that comes to my mind is every single time anybody mentioned Apple, they end up talking about Steve Jobs. So the question is, the person who's running it now, like Tim Cook, why he's not mentioned as often as Steve is.

Kip Knight (16:38.027)

Kip Knight (16:50.55)
Well, I admire Steve Cook. I'm, look, I'm biased toward Apple. I've used Macs my entire career. I'm an Apple shareholder. I've read, what's that? My brother met him, but I've never met him. I've got a number of my friends who have met him. And, you know, like anybody else, he has his flaws. He was a bit mercurial. And sometimes if he was in a bad mood, he'd fire you. But, you know, other than that, he did so many good things as far as

Mudassir (16:57.616)
Okay. Did you get to meet Steve? Did you get to meet Steve Jobs?

Kip Knight (17:20.205)
creating this opportunity for literally millions of people to do better in their jobs and their lives and their creativity and et cetera, et cetera. But to get back to your question, why did Steve get all the credit and Steve Cook hasn't gotten as much credit? I don't know Steve Cook at all, but I would suspect Steve Cook is just fine with that. I mean, I worked at... What's that?

Mudassir (17:39.989)
Sorry, it's Tim Cook. Yeah, sorry, it's Tim Cook. I think you're saying Steve Cook. So his name is Tim Cook. Yeah.

Kip Knight (17:45.166)
Oh, Steve Cook, I'm sorry. I'm sorry, Tim Cook. But I think Tim is probably building on the legacy that Steve started. And if you truly love a brand, then frankly, it's not about you, it's about the brand. Because think about it, other than your children, the one thing you can work on in this earth is a brand that will be potentially going on many, many years beyond.

you know, your time on this planet. I worked at Procter & Gamble. You know, those guys have been dead for almost two centuries, and yet Procter & Gamble lives on as an entity and the original vision of those founders. And to me, that is part of the joy and excitement about working on a startup and a brand, because you could be building something that could go well beyond anything that you've imagined. And-

Mudassir (18:39.402)

Kip Knight (18:42.45)
You know, the odds are your name's gonna be forgotten soon enough, but your brand won't. And if you care about leaving a legacy and making a difference in this world, then that's a pretty noble cause.

Mudassir (18:54.657)
Yeah, so I happen to talk to a lot of founders on this podcast, startup founders, and also happen to be involved in a lot of early stage founders. So most of them, especially the early stage ones, they do not have like a huge marketing spend, right? Like they do not have a budget or something like that. So how can they build a brand? I mean, it's easier for Procter & Gamble to, I don't know, spend like 10 million on just an experiment. They can afford to do that like multiple times in a year.

anybody who's just starting out, it's a pretty tough job for them to build a brand. So how do you think they can do that?

Kip Knight (19:31.558)
Well, here's the good news. They don't have to spend anything in the beginning. What they need to do is to sit down and think about what their brand strategy is. Because let me give you a hypothetical example. If I gave you $100 million to go spend on marketing, and you didn't have a brand strategy that was solid, who cares? I mean, there goes $100 million. And just watch the Super Bowl any year if you want to see how to burn money in a hurry.

Mudassir (19:37.985)

Mudassir (20:00.365)

Kip Knight (20:00.598)
hundreds of millions of dollars, poof, and there are so many examples I could give you of wasting money. But to anyone starting a business and thinking about a brand, the fundamentals are there. I've written two books. The first book is called Crafting Persuasion. And if you go to and go to the exhibits, go to exhibit two, it will lay out some of the fundamental questions that you should be able to answer

And I've mentioned it before, but I'll mention them again. Who is your target audience? And get specific. It's not gonna be like, you know, men 18 to 49. I wanna know deeply, you know, from a psychographic, behavioral, situational point of view, who are you going after? What problem are you solving for? What benefit are you promising? Why should they believe you? What is the, you know, brand persona that you're trying to portray?

And then after you figured all that out, you can start crafting the fundamentals of your marketing planning, which would include your marketing channels, how you're going to deliver that message and how you're going to evaluate that messaging. And you don't need to start out with a million dollars or a hundred million dollars and start out with a thousand or 10,000. The beautiful thing about in the age we live in is you don't need to go out and make a expensive television commercial to start marketing. You can literally start it with a hundred bucks or a thousand bucks. And

The other thing is the beautiful thing about the ecosystem that is set up is you've got this continuous feedback loop in which if you're doing something and reading the results and evaluating and then going back and fine tuning and doing it over and over and over from an iterative point of view. That is so much better than when I started in marketing, you know, almost 50 years ago where it was like, well, you add the ad and I have no idea if it worked or not. I have no data to prove that it worked.

You've got plenty of data to go evaluate things now. So strategy before execution, you know, iterate and learn and do not get lazy and just start spending money for the sake of, you know, marketing. You gotta make sure you, the analogy I like to use with folks is if you were going to build your dream house, would you simply go out there and have people start throwing up lumber and concrete and all that? Hell no, you would have a blueprint.

Mudassir (22:22.453)

Kip Knight (22:24.382)
And guess what? You'd get that blueprint out every day and open it up and make sure they were doing what you said they should do. Building a brand is no different. You need a brand blueprint, and you need consistency to make sure that you're executing the original plan that you came up.

Kip Knight (22:52.688)
Can you hear me?

Wow, you know, you faded out. I cannot hear you now.

Mudassir (23:03.285)
Can you hear me now?

Kip Knight (23:04.427)
I can hear you now.

And I don't know if it matters, but your video is rather grainy. I don't know if...

Mudassir (23:07.305)

Mudassir (23:14.705)
Yeah, it's the same with you. So the thing is, the software that we're using, it's just their problem, not our problem. So what they're doing is they're recording live, and then they're also uploading live. So that is why, even if you don't see full HD video of mine or something like that, just continue. It's gonna upload in the highest quality, yeah.

Kip Knight (23:33.934)
That's fine. Yeah, I'm sorry. I lost you for about 30 seconds there. So.

Mudassir (23:39.885)
Yeah, no problem. We can go back with you giving an analogy of if you want to start building your house, how would you do that? So yeah. No problem. Continue.

Kip Knight (23:52.118)
Okay, just to recap on branding, I...

Let's see, I've totally lost the video now.

Mudassir (24:03.493)
Yeah, I just turned it off. So so yeah, like you're not distracted. It's still taking to your video recording in, you know, in HD. But it's just more like, yeah, we just don't need to be distracted. But like, is it working? Is it not working? That kind of stuff.

Kip Knight (24:08.386)
Oh, okay.

Kip Knight (24:19.018)
Okay, that's fine. The only trick is I'll have to pause and make sure I give you a chance to ask questions here. All right, so in... Okay, so in... I tell you what, on this one, if you wanna back up and just ask the branding question again, maybe I can just take it from the top.

Mudassir (24:25.981)
Oh, we can do it again.

Mudassir (24:38.277)
Okay, so I think I asked you about the startup founders and the brand, okay? So I'll just ask you the same question again, all right? So let me do that. Rolling. All right. One of the questions that I want to ask you, Kip, is you work with big, big companies, like P&G and all these companies. So if I were to think about P&G, is this like they can spend tens of millions of dollars in just an experiment today, right?

Like not just like one experiment, they can run multiple experiments because they have that kind of a budget, they have that kind of a, you know, balance available. But when you talk about early stage founders who I happen to know a lot of them because you know, they're either guests on the podcast like somehow I just met a lot of them. They do not have like that level of budget, not even like one 10th, 100th of that. How can such businesses, such people build a brand?

something I really wanna know and help the audience, like how can they start building the brand very early on in their startup ecosystem, yeah.

Kip Knight (25:41.89)
Well, I've got good news. Good news point number one is you don't have to spend any money on branding initially because you need to sit down and do some deep thinking about what your brand strategy is. And one thing I emphasize to anybody that I've worked with on startups is you've got to put strategy before execution. And what do I mean by that? You've got some fundamental strategic questions you've got to answer first. Who is your top?

Mudassir (25:57.257)

Mudassir (26:04.746)

Kip Knight (26:10.638)
target audience and why. What is the key insights that you're building on in terms of creating your brand? In other words, why are you doing this? What need are you trying to solve for out in the marketplace? What is the benefit that you're going to be delivering this target audience and why should they believe you? Marketers make promises all the time that they break. And if a brand equal trust, how are you going to make sure that your audience can...

consistently believe that you can deliver the benefits you're promising. What is the tone and the persona of your brand that you wanna have the people, how do you want them to feel about you? Are you an innovator? Are you a comforter? Are you a rule breaker? Are you a conservative brand? I mean, there's so many different aspects of branding that you need to think through before you spend your first dollar on marketing. So do that first. The second point is be glad you're, you know, working in

Mudassir (26:42.11)

Kip Knight (27:08.09)
2024 because you've got such a wide array of low cost options to create content, to go test marketing, to get feedback from your target audience. And therefore that will give you the feedback you need to make sure that you're doing the right thing to execute your strategy. And if your strategy is not perfect and it rarely is in the first go, you can go ahead and

fine tune. Excuse me one second. I'm gonna disconnect this.

Mudassir (27:45.204)
Yeah, can you... yeah, this time the phone was ringing. Yeah.

Kip Knight (27:49.334)
We're cursed! Okay.

Mudassir (27:53.879)
This is a question that I really want to ask and this is a question that we have multiple takes on. All right, no problem.

Kip Knight (27:59.802)
All right, well, OK, I'm going to take it back from the top. All right. So the good news on branding for founders is a couple of points. Point number one is you don't have to spend any money on branding in the beginning. Why? Because you need to write down your strategy. And what I mean when you need a brand strategy? Brand strategy is simply making some choices. And what are the choices I'm talking about?

Mudassir (28:03.142)
Okay. Good.

Kip Knight (28:29.99)
Who is your target audience? What is the issue or problem you're trying to solve for? What is the key benefit that you're going to be delivering to this target? And a really important one that a lot of people don't really think about until it's too late is why should they believe you? What is your reason to believe? What is the brand persona that you're trying to create? Are you going to be known as a...

innovator or a rule breaker or a conservative brand or an emotional brand or a you know, etc, etc. So you got to answer all these questions before you start spending dollar one on your branding. And then the second bit of good news for founders is you don't have to go spend a million dollars on day one. In fact, that would be, I think, rather foolish. You've got this

Mudassir (29:24.824)

Kip Knight (29:29.122)
multiple experiments in terms of both direct and indirect marketing. You can get the feedback from your target audience. You can fine tune your marketing efforts. And over time, you will get smarter. And guess what's smarter than your competition in terms of what works and what doesn't work. That will create your brand playbook in which you can share that with everybody else working on the brand. And then by this iterative continuous learning process,

you will build brand equity over time. So I know it's intimidating and I know that it's easy to go spend a lot of money in marketing and then feel very frustrated. But if you take a strategic, thoughtful, deliberate, iterative approach, your odds of success are dramatically greater than if you don't.

Mudassir (30:15.581)
Okay, and how do you create a great brand strategy?

Kip Knight (30:19.754)
Well, I would suggest that if you could find an experienced marketer who is familiar with your category, spend that money. One of the things that has evolved in the last couple of years, which I've changed my mind on, is fractional executives. Initially, I thought fractional executives were not very likely to work in marketing because you needed somebody who was going to be on that brand for long enough

really understand it and be accountable for it, and et cetera, et cetera. I've changed my mind on that for a couple of reasons. First, for a startup to hire a experienced CMO for a particular brand in a category is gonna be anywhere from $300 to half million coming out of the gate. Now most startups, they can't even imagine spending that kind of money. But if you could get somebody who's working with three or four brands in a category, and they said it's 10,000 a month,

and they were able to do a lot of the things that we just talked about. That's money well spent. And the other thing is you don't have to have them necessarily stick around for years. You might do sprints of three month, you know, stages like, OK, stage one, you're going to do this and I'm going to spend 30,000 on it. And stage two, stage three, if you fall in love with them, you can always make a full time offer. But.

Mudassir (31:24.096)
Mm-hmm. Yep.

Kip Knight (31:44.874)
This is something that I would suggest is not a good trial and error opportunity. You want to make sure that you've got somebody who knows what they're doing. It's not their first goat rodeo. They know the category. They've got a great network. They know what works and doesn't work. And they can transfer all that knowledge to the team. And at some point you're off and running. So if you're going to make any big investment, go hire a great fractional executive that knows your category and has done this.

Mudassir (32:12.465)
Okay, okay, awesome. If you were to start a business today, a new business in any category, like you can pick any, how would you do it? How would you build a brand for that particular business?

Kip Knight (32:26.378)
Well, I do a couple of things. And, you know, I work with Tom Best Ventures, which is, you know, in several categories, I would never start a business, any of those, because it's outside of my skillset, but there are fundamental things that you do. First of all, you study the category and the category dynamics. You look at the total addressable market and you look at the current players, you look at the unmet needs in that marketplace, and then you look at your particular skillset and you.

my chocolate and your peanut butter. I mean, if I got something that is so great that if I brought that to this category, I could really make a difference and stand out from the competition, ideally in a sustainable and unique fashion. Because especially in the US, consumers are not lacking for choices. That's true for both B2C and B2B. So going out with a competitive edge,

which you can enhance over time, is gonna be absolutely critical if you're gonna go out and do that. And one thing that I've learned is, and Trent Weiss wrote a marketing book about 40 years ago called Positioning Battle for the Mind. And the theme of that, if you've read that one, you're shaking your head, and I still think it's one of the greatest marketing books I've read. But their philosophy is what I just told you. Step one, to find the category. And step two,

Mudassir (33:45.021)

Kip Knight (33:54.058)
be the number one or number two player in that category. But the thing that a lot of people don't fully appreciate is a category in and of itself does not need to be a huge number. A category can be, frankly, very small. They give the example in the book about when Red Bull started out, they weren't going after the beverage market. They were going after the energy market, which at the time was practically nothing. And they dominated it. And they continue to dominate it. So.

Mudassir (34:13.661)
Mm hmm.

Kip Knight (34:23.802)
For all the founders out there that are thinking about, well, how do I get started? Well, do what I'm talking about. Define the category, define your unique talents, and then say, what would it take to be the number one or number two player in this category? Because I saw a culture statement the other day by a startup, and it said, we're all about dominating this market and being number one, because number two gets a set of steak knives. In other words, be.

Be the number one and the biggest player in your defined category or else, you know, go find something else because that's typically what the long-term winners do. Over time, you know, the market settles out and if you're not in the top one or two spots, it's going to be really rough going.

Mudassir (35:08.165)
I would argue, respectfully, if you go after a new category, you need to educate a lot of people. And this is coming from an experience thing. So we started a company in fulfillment analytics, which is practically a very open category. Not a lot of people are working on that. But you need a whole lot of cash. You need a lot of capital to educate people. So the problem that we faced, and this is, again, purely from experience, the problem that we faced was...

Kip Knight (35:16.778)

Mudassir (35:38.125)
So first of all, you need to educate people. Like this is their problem. Like people need to analyze, people need to realize that this is my problem. Then you need to position yourself like this is the solution for that problem. And in that timeframe, you need to have a lot of cash. Like you need to have a lot of capital to spend, to educate and build that sort of an awareness. But the other part of that is if you end up starting a...

I don't know, suppose we pick another one. I think CRM category is pretty much, it's pretty saturated now, but anyway, like 10 years ago, maybe five years ago, you started another CRM, that category was just establishing, maybe like it was just growing, it was just a emerging category, and you would have started something there, your odds of making it decently big, not like PayPal, but decently big, would have been a lot higher. Do you think that's right or not?

Kip Knight (36:32.138)
Um, in a pragmatic sense, um, most startups are not going to become Apple. Uh, in a practical sense, I would say, and you know this already, what most entrepreneurs are hoping for is to build their business and their brand up to something that is attractive enough for somebody to say, Hey, I'd love to have that. And as the founder, you know, it's your choice, but

Mudassir (36:35.413)

Mudassir (36:40.99)

Kip Knight (37:01.45)
If you, you know, you've had a number of startups and success in the SaaS space and all that. If a larger brand comes along and says we'd love to buy your business and maybe from an ego point of view and we'd love to keep the brand that you've established as part of our brand portfolio, I mean that is a win-win. So the way to think about it is you're absolutely right. This is not for the faint of heart. This is, you know, running over

broken glass with bare feet for 26 miles and it's tough. And the failure rate is enormous. But the journey, so to speak, is one in which if you are consistent with a lot of the things that I've talked about, your odds of success go up because, you know, if you've identified the marketplace in terms of the missing opportunity and...

You recognize that it's a marathon, not a sprint, and it is gonna take patience, but you've got the consistency in terms of going out there and educating your target and letting the word spread. I mean, the greatest marketing in the world is word of mouth, as you know. I mean, there's nothing better than having delighted, clients or customers going out and being your unpaid sales organization to say, hey, come check this new platform or SaaS initiative out and et cetera, et cetera, et cetera. So, you know, I...

Just like with the VC world, the vast majority of VC investments do not work out. Unfortunately, the same is true for startups. But hey, them's the rules. That's the way the game is played. It's important that you recognize that going into it. But to go back to my earlier comment about the adventure in terms of sometimes you win, sometimes you learn, the attitude you've got to take is no matter what happens, I'm going to take that experience and apply it to do something.

the next time that might be the thing that gets me over the hump that I need to get over.

Mudassir (39:02.657)
Okay, yeah, totally I get that. Tell us a little bit about Tom Best Venture. Like, what's your investment thesis is? What's your role in that? What kind of startup do you invest in? Yeah, let's talk about that a little bit.

Kip Knight (39:14.638)
Sure, Tom Best Ventures has been around, but we just celebrated our 25th anniversary. Just wrapped that up this year. We are funded by one gentleman, Peter Thompson, who lives in Canada. We are about half billion dollars assets under management and we focus on four sectors. It's FinTech, PropTech, cloud infrastructure and cybersecurity.

We've got some amazing venture partners that focus on those sectors and they're really experts and they know what good looks like and they not only find them but they help nurture them. We've got one of the longest-serving managing directors I think in all of Silicon Valley. Don Butler has been doing this for over two decades and doing a fantastic job leading the team. I mean as far as my role goes

what they call an operating partner, and I focus on marketing. And in addition to that, I serve on the board of one of our startups, Quidd. And it's been a lot of fun because when you work with somebody that's got as much experience as Don, he's been on the roller coaster ride multiple times. So, you know, a couple of years ago, I can remember sitting around and it's when people were just throwing.

just mountains of money on the table and even pre-revenue and you'd be going, am I missing something? And people like that. Well, I've seen this party before and let's see what happens in another 12 months. And we're not going to be stupid and just throw money after all the others. And sure enough, everything crashes and burns. And then there's the rebirth. And the cycle starts over again. So I haven't seen anybody in the startup game

Mudassir (40:44.084)

Mudassir (40:48.284)

Kip Knight (41:09.81)
Should be a history student because, you know, we've been to this party before and there's exuberance and then there's total despair and then you start it all over.

Mudassir (41:21.781)
Do you think 2024 is gonna be exuberant again? Like, you know, people will start writing million dollar checks or something like that again? Like, just like that?

Kip Knight (41:30.19)
gee, if I really knew that answer, I'd probably get off this podcast and go start my own consulting firm and charge you a lot of money. I'm not exactly sure what's going to happen. There are a lot of variables out there. Obviously, there's a big election coming up in 2024. That'll be a big factor. I think the Fed, are they going to stop raising rates? Are they maybe going to cut rates? That could be a big factor. Inflation looks like maybe it's getting better, but who knows? If we

Mudassir (41:35.329)
Thank you.

Kip Knight (41:58.614)
It's gonna blow up in the Middle East and oil prices went over $100 a barrel tomorrow. That could be a factor. So it's a multivariable equation. I think the smart VC companies are ones who stick to their knitting. They've got a game plan. They've got contingencies and they don't let outside variables really throw them off their game. And that's pretty much what we're doing with our current portfolio. We've not made a...

you know, extraordinary number of new investments this year. We've had a couple of great ones like here, but for the most part we're doing follow on investments because one of the things we pride ourselves on is that if a company is doing well and needs more money, we're there for them, not only in terms of cash, but also in terms of helping them identify new talent, help network new client opportunities, et cetera, et cetera. So we wanna be a strategic partner for the long run. We don't wanna simply be, here's the check.

Good luck, you know, see you at the IPO. That's not our style.

Mudassir (42:55.465)

Mudassir (43:01.149)
And that's a very rare thing to say, because I think I probably hosted 30 plus VCs already. There's 20 plus just in the pipeline, and this is the first time that I'm hearing that, because usually the thesis is, like they've invested something, they're happy to help every startup here and there. And then the goal is to get to the liquidity event. Could be an IPO, could be a buy-off, like whatever that is, right? Okay, awesome.

Kip Knight (43:26.898)
Yeah. Now we're patient investors. And again, reputations matter. I mean, we talked about branding earlier. One of the primary things I work on is the brand image of Tom Best. And one thing I'm extremely proud of this past year is when Silicon Valley Bank melted down, we were proactive in terms of reaching out to our companies and saying, if you need help on payroll, if you need help on whatever, we are there for you.

Mudassir (43:33.599)

Mudassir (43:49.793)

Kip Knight (43:55.062)
And I'm sorry to say there were some other VCs out there that were not so eager to help out. There was like, they almost put their phone on, blocked the number of anybody calling in from a portfolio. They weren't there for them. And people talk. And I think that, you know, over time, if you can create a reputation for your VC firm in terms of these guys are gonna stick with you no matter what, and they are there for the long run.

Mudassir (44:02.239)

Kip Knight (44:25.59)
Boy, what a great reputation to have because that will encourage founders that are looking for a VC partner to at least give us a shot. And again, there are over 600 VCs out in the Bay area. So if we can use that as a bit of our competitive edge, then, you know, good for us.

Mudassir (44:43.821)
Do you think, like I asked VC a long time ago this question, so I'm gonna ask you the same question, because I want to take a different take on that. Do you think VCs actually compete with each other as well?

Kip Knight (44:58.874)
Yes and no. You never have a startup, well never is a big word, but you rarely have a startup that would only have funding from one VC. Typically you would have, and you know this, you would have two or three or four team up and spread the risk and go forward. So now obviously if you've got 600 VCs and you're going to have maybe three of them invest in this exciting new startup, then yeah, they're competing against each other.

Mudassir (45:13.381)

Kip Knight (45:27.286)
But ultimately, they're going to have these other VCs that they work with. And it's important that VCs play nice with each other because, you know, you are depending upon your fellow VCs to let you know when there are opportunities they think might be appropriate to team up with. Frankly, you know, on the opposite side of it, if you've got a potential investment and a VC has already done the due diligence and they're going, wait a minute,

You really need to dig deeper on this one because I'm not quite sure, you know, this, this is what it looks like. So, yeah, uh, you definitely compete, but it's friendly competition. It's not wishing that they go out of business and you succeed. It's, it's, it's looking for that. Synergistic opportunity to work together with the right VCs at the right time with the right companies so that you can help your founders out and, and create an ecosystem that is supportive of this incredibly important part of the economy.

Mudassir (46:07.145)

Mudassir (46:23.121)
Yeah, I wanted to ask you a question which I think you have answered partially, maybe completely and that was how do you build a brand as a VC firm? Because we usually talk about branding as a company, like any company, any startup, but we rarely talk about the branding when it comes to VC firms and, you know, GPs and LPs included as well. So how do you think we can do that? How do you think you're doing that? So yeah, let's talk about that a little bit.

Kip Knight (46:52.694)
Well, the fundamentals are the same. When Don approached me way back in 2008 about being associated with Tom Best, I didn't know anything about VCs, but I knew a lot about marketing and branding. And so I've tried to do a lot of the same things that I've done with every other brand or category I've worked on. You need a brand strategy. You need to make sure that you're clear on what you stand for. You need to make an investment.

primarily invest in public relations. We work with BAM, which is a great PR agency, and we are constantly looking for opportunities for people like Don and Neiman and Mesh and Ashish and Dave and all the other folks to share their expertise with national publications so that over time, you hear Tom Best in the news, and therefore if you've got a meeting with Tom Best, it's not a cold call. It's like, oh yeah, I've heard about you guys. You do a lot in Pentech, you do a lot with cyber.

So your reputation precedes you. And it's the typical marketing funnel of anything. First of all, you've got to have awareness, like have I heard of you or not? And then you've got to have regard, like what do I think of you guys? And then you've got to have consideration, well, do I want to work with you or not? And then you've got to ideally have trial and loyalty recommendations, like boy, I work with these guys, they're phenomenal. And I would recommend that you work with them too. So it's...

I used to work as the CMO at Taco Bell. It's not quite the same as selling a taco, but there's more similarities than differences.

Mudassir (48:27.957)
Awesome. So, Kip, what we do is, so thank you so much, you know, for all the candor and the great answers. So, we have a decent big of a community, so we got it, probably, like, this is a very, very proud moment to share that. Like, I haven't made it public, but we crossed, like, 20,000 downloads on the podcast, which is fantastic, yeah. So, very happy to share that. But we also have 15,000, 20,000 plus.

Kip Knight (48:45.683)
That's fantastic.

Mudassir (48:54.781)
of a community on the newsletter side or on the channel side. And what we do is before anybody's coming over the podcast, we float out a questionnaire to quite a handful of people, like hundreds of thousands of people or something like that, hundreds of thousands. And we ask them, yeah, and we ask them the same thing, like, hey, Kip is coming tomorrow. Any question that you wanna ask him. So a lot of people are kind enough to just reply back.

But they're like all kinds of questions, like all kinds of crappy questions, all kinds of good questions that they want to ask. So we just handpicked a few of them. So when I ask them to you in no particular order, in any given length, you can just answer them according to your liking. OK? Awesome. All right, so the first one is building a brand or scaling a brand. Which one is harder?

Kip Knight (49:36.126)
Okay, that'll be fun. Go for it.

Kip Knight (49:47.626)
Boy, that's a tough question. I think scaling. You can have a great conversation about any kind of brand you'd like to create. And if you and I, let's say you had an idea, within a couple of days, you and I could at least have a working thesis as to what that brand is. Then we could start maybe fine tuning and going to get some feedback and lock and load that. OK, now comes the fun part, bringing it to life.

and it's going to take money, it's going to take time, it's going to take effort. So both are important, but scaling is definitely the one that's the heavier lift.

Mudassir (50:28.657)
Okay, awesome. This is a fun one. So what's the difference between a great marketeer and an average one?

Kip Knight (50:40.102)
I tell you three things. First, a great marketer understands that marketing is a means to an end, not an end in itself. The biggest mistake that a lot of marketers make is that they speak marketing and they don't speak finance. The number one reason that marketers get fired is because of a lack of alignment between the marketer and the CFO and CEO on board because the marketers

Mudassir (50:58.386)

Kip Knight (51:09.37)
and the CEO is getting frustrated like, I hired you to build sales and to build brand equity and, you know, but more than anything else to make the numbers work. So great marketers never forget that. They are part of a, you know, Uber goal of making sure this business succeeds and not, hey, I'm gonna show you my ad or boy, we have this really clever social media campaign. That is a distraction. So that's number one. Number two,

They are great diplomats and collaborators. They, more than any other function in the company, are constantly going out and making sure that everybody understands what the role of marketing is, not in a braggadocious sense, but in terms of a functional sense and how everybody on the team can be part of the marketing effort. Because just because you don't work in the marketing department doesn't mean you can't have a very valuable contribution to the branding and the marketing of that business. So.

great marketers do a great job communicating and getting people excited about that vision. And the final thing I think that great marketers do is that they are legacy builders. So in other words, they're not just in it for this quarter or this year, but they've got a long-term vision as to what can I, as the leader of this function, along with my team and along with the rest of the company, do that will make a difference in the long-term as far as the way that people think about this brand.

Mudassir (52:22.75)

Kip Knight (52:35.726)
Because as I mentioned earlier, brands can be immortal. And there aren't many things on this planet that are immortal. So what a great privilege it would be to work on something that's going to stand the test of time.

Mudassir (52:47.377)
Yeah, yeah, what a great way to answer that one. So the next one is, and this is coming from a founder who runs an e-commerce business. So he was like, a lot of e-commerce companies are trying to sell the same thing. Like, you know, for example, you can pick Atlantic Wear or something like that, like maybe Lululemon, and there's like hundreds of Lululemon who's probably sourcing the same piece of, you know, clothing from China, branding it, and then selling it. So why some companies stand out?

and others don't.

Kip Knight (53:19.822)
Well, as you know, I spent six years at eBay and know a bit about e-commerce and helped open up eBay and a couple of markets. It's a tough category. And

Mudassir (53:31.865)
e-commerce or just you know athletic wear?

Kip Knight (53:35.022)
Oh, e-commerce and athletic, I mean, both of them are tough categories. But here's the one thing to keep in mind. If the primary way you're competing is on price, then it's game over because anybody can compete upon price. And so the one advice I would give for anybody working in any category, athletic wear would be a great one, is what what does your target audience really care about? Because, you know, at Procter & Gamble, they used to work a lot on

Mudassir (53:37.364)

Mudassir (53:41.758)

Kip Knight (54:04.002)
consumer insights. And that was really doing a deep dive on understanding how consumers were thinking and feeling and acting about a certain category. And you've got to remember, you're probably not the target. So you're going to have to really work hard to get inside. One expression I love is you can't read the label. You can't understand what's going on inside somebody's head until you've really.

kind of dismissed all of your biases and prejudices and assumptions, and you truly got to try to understand where that target audience is coming from. And if you can do that, if you can really get inside their head and unlock some of the insights that they've got and turn that into a meaningful benefit that you can deliver upon, then that is the unlock that the vast majority of businesses miss. And so my recommendation would be

continually, you know, stay in touch with where consumers are and where they're going and how can you apply that knowledge to make your brand stand out from the competition.

Mudassir (55:15.825)
Okay, so how can a startup founder build a brand and a company at once? So like a personal brand and the company at once.

Kip Knight (55:24.386)
Well, I would argue, why do you care about building your personal brand? Because at the end of the day, your investors probably could not care less about your personal brand unless it's going to, you know, either be a big plus or, you know, be in addition to the value we're adding. Um, if you, um, happen to have a personal brand like a Steve jobs that can. Compliment.

what you're working on, then fantastic, go for it. But, you know, humble leadership, leadership that is willing to, you know, Harry Truman had a great expression, and you can get amazing things done if you don't care who gets credit for it. And so some of the best founders that I've seen out there, you know, they could not care less if their name is associated with that business. What they cared about is the business was successful. And if they were the architect of that behind the scenes, nobody really knew it,

That's fine. That's not what they were there for. They were there to build the business, not worry about building their ego. So personal brands are almost like, maybe there is the exception where it matters, but for the most part, it doesn't focus on your own business brand, not your personal.

Kip Knight (56:48.17)
I lost your sound.

Mudassir (56:51.745)
Sorry about that. Yeah, so, yeah, so that's the funny one. Why haven't you started a podcast on marketing yet?

Kip Knight (56:52.234)
Yeah, there you go.

Kip Knight (57:03.302)
I admire what you're doing with podcasts, but I know it's a certain amount of work. I think at last count, there were like a million podcasts out there. And I frankly, I was on a podcast yesterday. I'm on this one today. I'll probably be on some others in the near future. I enjoy meeting and talking to people like yourself. I'm flattered that you'd have me come on, but there are a lot of other things I'd rather do than have to worry about a podcast.

Testify. It's hard work. This is no easy thing to do.

Mudassir (57:33.825)
It's hard. Yeah, it's a lot of work. It's a lot of work. Okay. All right, so the last one is your top five books on marketing that you think every founder should read, regardless of the category, regardless of the state that they are at. I think everybody should read it.

Kip Knight (57:53.278)
OK, well, I've already mentioned one. It was Positioning Battle for the Mind by Travel Beast. You're going to laugh at this one. But Ogilvy on advertising, again, a classic. Jeez, it must be at least a half a century old. But a lot of the principles Ogilvy talks about are still very valid today in terms of branding. I would have to go cite.

Mudassir (57:58.961)
Yeah, positioning, yeah.

Mudassir (58:17.397)

Kip Knight (58:22.894)
Plane to Win by A.G. Lafley, former CEO at Procter & Gamble. That's one of the best books on strategy that I've ever read. And then a companion to that one that I've always admired is Execution by, I believe, Larry Bossidy. And his opening line is great. It's like, you know, strategy has always got the sexy stuff, but execution is absolutely critical because you have the greatest strategy in the world,

rated execution, who cares? So that's one. And then if you don't mind my indulgence, I'd plug my own book, you know, Crafting Persuasion in terms of just the fundamentals of how do you craft a persuasive communication message and execute it consistently. A number of organizations have picked that up as a bit of a textbook. So I'd recommend that one highly that everybody go ahead and check that one.

Mudassir (58:55.06)

Mudassir (59:01.789)

Mudassir (59:20.217)
Absolutely, absolutely. All right, Kip, so we do have this one small closing ritual in the podcast. So we ask all our guests a question for our next guest without telling who the next guest is gonna be. So we got a question for you from the last guest. We're gonna take a question from you for the next guest. So the question, yeah, so the question that the last guest left for you was, looking back, is there anything you would have done differently in your career?

Kip Knight (59:36.67)
Okay, that sounds like fun.

Kip Knight (59:47.682)
Yeah, I was on a podcast the other day and a similar question came up. Uh, I really, uh, I have a lot of, you know, no regrets, but, um, I, I started out my career, um, believe it or not in college, I was speaker's chairman and I brought in Gene Roddenberry of Star Trek fame, and it was such a huge hit. Uh, I kind of got the entertainment bug there and.

I've always fantasized, boy, wouldn't it be really cool to be marketing for a hit movie or hit TV series or hit band or whatever. And then when I had my consulting business, I had Warner Brothers as a client at one point. But the more I've gotten to know that space, I know that, boy, talk about a crap shoot and talk about political. So, in my fantasy world, would I have gone off and maybe done some more in the entertainment space? Yeah, that would have been a lot of fun, but.

Mudassir (01:00:20.641)
Thank you.

Kip Knight (01:00:44.482)
probably would not have worked out that well. So I'm good. I'm okay with it.

Mudassir (01:00:48.885)
Okay, so the question for our next guest.

Kip Knight (01:00:53.214)
Okay, well, I'm sure I'm not the first one to ask, but you know, it's five years in the future and you're looking back on the impact that generative AI has had on both marketing and business. You know, give me the best thing that came out of it and the worst thing that's come out of it. Well, I'd love to hear the answer on that.

Mudassir (01:01:05.737)

Mudassir (01:01:15.609)
Awesome. I hope, you know, whoever the next guest is, they do justice to the answer.

Kip Knight (01:01:19.382)
Well, I'll have to listen in and see what the answer is. That'll be cool.

Mudassir (01:01:22.51)

Kip Knight (01:01:27.371)
I just lost you again.

Mudassir (01:01:29.781)
So yeah, we do this thing. So we press this thing while we're talking. Leave it when we're not talking. So I avoid the overlap. So I want you to completely speak, and I'm not interacting or interjecting again. So let's say the goodbyes, and then please stay on the call. So I can start the recording, and then OK. So thank you. Thank you so much.

Kip Knight (01:01:30.786)

Kip Knight (01:01:36.383)
Oh. Oh, got it. Okay.

Kip Knight (01:01:45.838)
That's good.

Kip Knight (01:01:53.986)

Mudassir (01:01:58.589)
Thank you so much for the time. I appreciate it. And thank you so much for sharing so much insights with us.

Kip Knight (01:02:04.278)
It's been a lot of fun and I hope I've been able to inspire some folks to go out and do some great brands because at the end of the day it's well worth it.

Mudassir (01:02:13.074)

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