A hasty look at any startup communications plan can provide a basic value point for their PR and media relations investments. While incumbent brands have to worry about everything from crisis campaigns to shareholder messaging, most startups use PR to get themselves embedded in the minds of their target audiences and promote their value proposition.
For those that don’t know however, there is a secret amongst the craftiest of VCs, advisors and investors: sometimes the goal isn’t to hit critical attention, or simply increase sales. Sometimes the press is used in far more covert and lucrative ways.
Intimidate Buyers into Acquisitions
There exist diverse strategies used in the world of mergers and acquisitions. One such strategy is that If you want a company to buy you, make sure you sell into their client base. This applies to the world of business-to-business as well as business-to-consumer companies. Outside of making a larger organization realize that both your targets might be accretive once together, it’s often about larger brands retaining market share and mindshare as top dog in the industry.
So how does PR work in this sense? PR allows entrants the ability to showcase strength and power without really possessing it via establishing a credible threat. An organization doesn’t need to spend massive branding dollars to feign a run at market share. All they need is a solid PR investment to hit the media in the right ways. If a company can show that they mean business through the media, they will become a potential threat. In the real world, the quickest way to kill a threat is to buy the threat.
Keep Competitors Off Your Trail
Houdini could have become the greatest marketer known to man if he was advised to apply himself to the world of commerce and trade. Everyone from large consumer goods brands to small innovators have good reason to throw their competition off before a major release. All PR is not good PR. Especially if it leaks trade secrets, or tips off competitors.
Smart corporate manipulators know how to tip the scales in their favor. By making media relations noise with a straw man endeavor and keeping eyes fixated on the smaller play, an organization can buy their research and development department’s time, privacy and protection from the larger initiative at hand. By marketing the heck out of a secondary initiative through a feigned leak or active media relations endeavor, the real development has bought itself time for a safer and more protected market entry. Smart VC’s often know that the first to enter is usually the largest to exit and advise their communications teams to engage in sleight of hand accordingly.
Publicize Investors Before Product
It’s no secret that startups will select their VCs and investors based on both dollar amount gained and the advisory/relationship value of bringing on a certain team. The truth that is less discussed is that the most valuable marketing play is often the reputation of an investment team. This can change the entire game for a startup. It doesn’t matters if the investment group has zero participation in any facet of the business, because a well-known VC will inspire automatic faith, garner confidence and compel potential customers, vendors, partners and especially other investors to take a long hard glance at the product/service. Think Mark Cuban or Sequoia Capital.
The savvy will use this knowledge to have their PR professionals brand their investors months before the marketplace knows of any potential investment. At the moment a funding round is launched, tying together a product combined with an all-star VC team creates a larger media response and a level of credibility that is nearly unattainable otherwise.
Market A Crisis
The wiliest of investors often rely on emotion based strategy and contrarian undertakings rather than cutting edge technologies and data. While most companies will work endless nights to reduce the nature of a crisis, it can be beneficial to use highly specific crises to create leadership heros, provide rationale for operational changes and flip the exposure into a positive.
The best analogies come from a careful study of film, television and entertainers. As a population, we rarely fall for Dudley-do-right at first glance. Instead we like the rough around-the-edges, anti-hero who garners redemption by doing the right thing in the end. We’re enamored by the convert, by the one who sees the error in their ways and changes. From the Grinch to Severus Snape, we clap for them at the end and reflect upon their true colors.
In public relations, this often means finding the right crisis, marketing it the right way, and establishing a turn-around hero or organization who not just cleans up their act, but changes the nature of an industry or practice for the better. The press loves a good crises to write about, the craftiest of investors know the exposure value of flipping that crises to drive exposure and acclaim.
