I’ve been having this PR discussion with three separate portfolio companies at once so I thought I’d just publish my thoughts more broadly.
I have written many times about PR so if you want a deep dive on the “how” of PR you may enjoy reading some of these posts.
PR is an insanely valuable activity in early-stage companies. Very few investors understand this and even fewer startups. When you’re an early-stage business every dollar matters and because many startup teams these days are very product & technology centric they often miscalculate the importance of PR. I believe PR is often not tangibly measurable and for quant-oriented people this is hard to accept.
The benefits of PR are exactly that: Immeasurable. They are silent. They don’t show up in a calculation that says I spent $7,000 and I got X-thousands inches of press. It doesn’t work that way.
1. Recruiting – One of the hardest tasks of any startups is recruiting world-class talent. It is possible, of course, to recruit great people as an underground startup but it is 10x easier when qualified candidates whom you may not even know read about your company and are excited by your vision. I work with a startup who has an insanely talented & connected team but still struggled to add staff. After their recent PR they reported back to my that candidate inflow has gone up dramatically. As I said, PR has silent benefits that you barely recognize until your newly acquired team is firing on all cylinders and many people sort of forget the reason they attracted such great staff was from great press coverage / world-of-mouth.
2. Business Development – Biz Dev is hard. You’re a startup and every major company you meet is trying to size you up as to whether it’s worth their time striking a deal with you. Then they read about you in the American Airlines magazine or Wired or Recode and they think to themselves, “we should really reach out to that company.” You get the call. You’re happy. Business is going well. There is no attribution on that inbound phone call. By the time they’ve called they may not even remember themselves where they first heard of you. PR pays dividends in Biz Dev.
3. Fund Raising – No self respecting VC would admit (even to themselves) that they are influenced by what they read about you in the press. But human psychology can’t be ignore – we are all influenced by what we read. Sometimes you read it directly and think, “I should really reach out to that company” and sometimes it comes in the form of world-of-mouth like somebody I work with mentioning a company they read about. But as I like to tell entrepreneurs, great PR could add $10 million to your valuation or increase your chances of closing a round 2x and either case is a reason to make sure you have good press. It’s much hard to get funded as a company nobody has heard of.
4. Staff Morale – Often overlooked is staff morale. I once asked somebody at Accenture (where I worked early in my career) why they advertised so much at airports. The reply was, “So many of our employees fly every week to projects and by seeing us advertised every time they fly they feel more proud working for our organization.” Well, at least until Tiger Woods decided to send a few too many racy text messages But the reality is that employees love seeing their company get positive press. They get feedback from their peer group, boyfriend and parents. Classmates call. People give them attaboys. Press matters. You can’t measure the retention benefits but I promise it exists. Just like negative press hurts.
5. Enterprise Sales – The very first thing a potential customer does when you email or call to set up a meeting is Google you. When they want to propose spending money with you their boss Google’s you. So does the enemy who is fighting for the customer to choose another vendor. Give your champions ammunition.
6. Future PR – This is something often overlooked. When you eventually want your home run coverage in the Wall Street Journal or are trying to convince Good Morning America to have you on their show – the first thing the journalist or executive producer will do is Google you. If they find great pieces on you from your past PR they are more likely to want to talk. Of course you need a new angle to get a journalist interested because they don’t simply want to write what everybody else has covered. But neither do they want to be out on a limb as the first person predicting you will change the world. Press loves company as much as they love exclusivity. Ironic, of course. But true. I promise.
7. Customer Acquisition – I left customer acquisition for last intentionally. Why? Because every single company I talked to thinks this is the reason to do PR and often it is the least important reason. The narrative goes like this, “We appeared on TechCrunch” or “We were featured in the App Store” but we didn’t get nearly the downloads we expected. Many people downloaded our app / visited our website / etc. but didn’t convert to sales. So this was a wasted effort. We’re going to dial down our PR for a while.”
See points 1-6. Rinse. Repeat.
When I was the CEO of my first startup our company won the B2B PR company of the year in the UK. Not for startups – for any business. In the write up of our success I was quoted as saying, “If I had $1 dollar left to spend on marketing I would put it to PR.”
If anybody tells you differently be suspect. Most people don’t understand the silent benefits.
What have your experiences been? What stories can you tell about the silent benefits to your company?
(Cross-posted @ Both Sides of the Table)