Why brand awareness is even more important than product development
David Friend, CEO and founder of cloud storage company Wasabi, knows the importance of a clear value proposition. This belief has served him well, having started and sold five companies, including Carbonite, prior to launching Wasabi. Friend won’t start a company unless he can deliver its promise in 10 words or fewer and believes in investing in brand awareness from the outset.
Friend and CMO Michael Welts are aligned when it comes to building brand, whether developing a value proposition with a simple message or rejecting a metrics-only approach for measuring success. Since their first conversation, it’s been about delivering "cloud storage that's 80 percent cheaper and 6x faster than AWS.” Their commitment has driven success as Wasabi continues to make waves in their category.
Clear value proposition
Friend: I like things that are easy to sell. I don't like complicated products. When I was teaching at business school eight or 10 years ago, I had an exercise for people trying to come up with ideas for new companies: “You’ve got 10 seconds to catch somebody's attention while they’re driving. How am I going to get my point across? Show me the billboard.” That's the way I think about things and that's why we made Wasabi so simple. There really isn't anything to learn about Wasabi. It’s an API, it stores your data. It doesn't matter what kind of data is.
Welts: When Dave interviewed me, he said, “Tell me what the billboard is for Wasabi.” He had given me some advanced notice of what he thought the value proposition was going to be and we eventually got to where we're at today, but the second-tier message had to be just as simple. So, I called it the "Wasabi peas," three simple messages that we build our sales strategy and our value proposition around: price, performance and protection. Those are the three things people look to for getting into the cloud with their data.
Investing in brand
Friend: We spent millions of dollars building brand awareness and a lot of companies don't do that. They'd rather spend that money on product development or something. In my view, you raise a little more money, you give away a little bit more percentage of the business to whoever your investors are, then you spend that money on building a brand because that's something that nobody can take away from you.
Welts: You have to give some credit to what's been done over the last few years just to build the brand, so that people recognize and go looking for it. If you look back three years ago, it took us a year to get our first 1,200 customers. Two years later, we're at 15,000 customers. It took us five months to get our first petabyte of data. Now we're doing three petabytes of data a week and expect to be a petabyte a day by the end of the year. You have to build a memorable name, you have to build a new category, and that’s what we've done. Hot cloud storage is a significant new disruption to the old traditional cloud storage market. I think that's why we’ve seen success.
Keeping things simple
Friend: You can’t always run your business by just looking at your list of features or something that people say they want to add—that’s a bit like driving by looking in the rearview mirror. You have to listen to a lot of different points of view and then synthesize them. What I heard in our market is: Data storage is not exciting data, storage is something we have to do, and I'd like to do it the cheapest, simplest way possible. When Mike and I had our first conversation, that resonated with him immediately and he said, “I totally get it.”
Welts: In tech, most of the people that wear the marketing hat usually come from a technical background. They’re product management or product marketers, so they tend to think of speeds and feeds or product features. My long-standing view has always been that features ultimately commoditize, so it really comes down to how simple the message is. That's my differentiation, if you will, among others in our space. I've kept it extremely simple.
Metrics and measurement
Friend: I like to look for the leading indicators of results—focusing on things which, if done well, will result in something else happening downstream. Those will vary from company to company, but anytime I'm looking at a metric, I try to say, “What is it that we could be looking at that would give us an advance warning on this particular metric?” In B2B, revenue is a lagging indicator, and you shouldn't be focusing on it. And if I tell Mike to go cut his advertising budget by 50 percent, the numbers will go down in the aggregate. Now, what is it that’s causing it? That’s a lot harder to know and it’s where experiencing gut feel comes into play.
Welts: We started out building brand association or brand awareness right out the gate. For the first 18 months, our KPIs were website sessions and free trial signups. They've now morphed into top of funnel activities, and it's a longer-term sell. But even in that case, it's still less than 30 days to close some of these larger accounts. It can extend out to as much as six months, but that's the power of a very effective value proposition. If they’re losing money while they’re not switching over to us, they’ll move rather quickly to try it.