What Makes a Great Brand?

And a unique approach to pitching investors

Author

Michael Houck
July 30, 2024

Hey y’all — here’s today at a glance:

Opportunity → New Bloomberg Terminal (Tarpit idea)

Framework → What Makes a Great Brand

Tool → Telescope

Trend → Coding with Claude 3.5 Sonnet

Quote → Pitching Seed Investors

PS — Become a member to get access to my founder membership including an engaged community, fundraising support, fireside chats and more.

🔗 Houck’s Picks

My favorite finds of the week.

  • This investor is looking to invest $150k in 2 AR/VR companies (Link)

  • How to 3x your conversions for your SaaS (Link)

  • Netflix’s founder on what culture is and isn’t (Link)

  • Intercom’s co-founder on the founder CEO vs “professional” CEO debate (Link)

  • Scaling sales teams is the biggest bottleneck for B2B startups (Link)

  • How Airbnb solved the chicken and egg problem (Link)

  • How to think about solving problems as a startup founder (Link)

  • Sam Altman’s thoughts on what to focus on when hiring (Link)

  • How to use Reddit and AI to find winning startup ideas (Link)

💡 Opportunity: New Bloomberg Terminal

A “tarpit” idea is one that everyone gets stuck trying to make work — but never succeeds.

A good example is an app to meet new people in your city.

Sounds great in theory, and is something that people want, but there are hidden challenges around human coordination that make it fail to reach venture scale time after time.

This week I’m sharing something that’s NOT an opportunity (though I’d love someone to prove me wrong).

The idea? Trying to create a new Bloomberg terminal for stock traders:

An AI-powered trading terminal with a modern UI sounds way better than one that was created 30 years ago, right?

Of course people would want that, it’ll probably be 10x better.

Right????

The problem, of course, is that it’s a business with deeply entrenched network effects:

The switching cost is just not worth the perceived gains, unless AI enables something more than a better UX. The answer, to me, seems currently unlikely.

🧠 Framework: What Makes a Great Brand

When you’re just starting out, most startups can get by with just grabbing a free icon as their logo, writing content in their own voice, and calling it a day on the brand.

But as you grow that doesn’t hold true.

A strong brand turns customers into advocates and, if done well, communicates your opinionated perspective to the world (hopefully in a way that resonates and sticks in their mind).

I see a lot of founders misunderstand what a brand is in the first place.

It’s not just what goes up on your homepage or social media profiles. There are multiple foundational layers that you’ll need to intentionally think through and build on top of.

Ideally, the brand starts with the same vision, mission, and values that your product does.

This “periodic table of branding” shows everything that goes into it and the high-level question you should be asking yourself about each part.

If you’re struggling with your brand identity or just considering a refresh, take a minute to evaluate — does each square below embody the answer to the relevant question at the bottom of the image?

🛠 Tool: Telescope

You need more customers.

It’s ok, we all do.

Telescope is an AI tool that uses plain-text prompting to return custom lead lists for you.

You can get insanely specific with the prompts — worth checking out, especially if you’re selling via cold email.

Btw — I added over $10,000 in revenue for my ghostwriting agency last month from cold email. And now I’m testing out offering an unlimited high-volume cold email service to a few friends and readers.

We’ll source the leads, set up the scalable email infrastructure, write the emails, and route them to sign up for your service or product. We’re seeing it work well for agencies, b2b companies, and newsletters (as a growth channel).

Want in for our beta? Reply to this email and let me know.

📈 Trend: Coding with Claude Sonnet 3.5

Sonnet 3.5 feels like the first model that is truly gamechanging for how long it takes to write real, working code or starting new projects.

If you’ve held out using LLMs as part of your flow, or using Cursor, now’s the time to try:

With future models this will also extend to non-technical founders, and we’ll see a Cambrian Explosion of new businesses.

💬 Quote: Pitching Seed Investors

A deck can get investors interested in learning more about your startup, but no deck will make them fall in love with your product.

Driving urgency among investors is hard — they’re incentivized to wait longer and get more datapoints about you as a founder.

But if they truly love it they’ll force the issue with their partners at their firm (or, if they’re an associate or principal, they’ll push harder).

Particularly if you’re building in consumer, here’s a hack you can use to build that feeling that you’re building something they’d be dumb to miss out on:

Just because this is focused on consumer doesn’t mean there aren’t similar types of opportunities in other industries.

For example, having a viral marketing moment with any type of startup, or having b2b clients call them to tell them how much they love the product.

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