Why a personal brand is key to startup success

Personal branding might be the business world’s favourite buzzword. Searches for the term have increased over 150% in the last decade and, according to advertising intel firm Nielsen, 92% of people trust recommendations from individuals over companies.

The term is first thought to have originated in the late 90s in Tom Peters’ now famous Fast Company article ‘The Brand Called You’. But interest in the phenomenon has exploded since the rise of digital media and the launch of LinkedIn in 2003.

The business networking site has been key in demonstrating the value of creating a professional identity and remains an important personal branding platform thanks to its relatively high organic reach rate.

More recently, visual platforms such as Instagram and TikTok have given rise to the ‘personal brand as a business model’. For influencers and content creators, a carefully crafted online persona is critical to cultivating an engaged audience for their businesses.  

There’s no denying that personal brand is a key component of the modern marketing toolkit. A growing body of research shows positive consumer sentiment and reported behaviours in response to business executives who actively engage in building their personal profile. 

As someone who’s lost a lot of money on NFTs, I can tell you that just because a famous US business influencer thinks something is a good idea, that doesn’t mean it is. There’s been a lack of real research or hard numbers tying the impact of personal branding to business performance or commercial results. 

So we conducted our own with global media intelligence provider CARMA, and identified a strong correlation between the personal media profile of founders and CEOs at billion-dollar companies and the fundraising efforts of their businesses.

The latest Coverage to Capital report – the second in a research series focused on demonstrating a return on investment in PR and communications – looked at 64 startup unicorns in the UK. These were defined as privately held companies which have achieved a valuation of more than one-billion US dollars. 

For this, we worked with CARMA’s expert team to analyse more than 65,000 media articles and over 10,000 LinkedIn and Twitter posts to offer a comprehensive study of the media profile of these businesses and their founders. This is what we found:

• The most-followed CEOs on social media secure greater investment: Unicorn companies whose founders have the largest number of LinkedIn followers secured over £763 million total investment on average. That’s over 20% more than the average total raised – £632 million – across the UK’s entire unicorn cohort. The same trend was true on Twitter albeit resulting in a smaller difference of 5.4% – with the most-followed CEOs raising an average of £666 million in funding in total.
   
• LinkedIn is the social media platform of choice for startup leaders: Just 6% of CEOs and founders at UK unicorns don’t use the business networking site, compared to 42% who don’t use Twitter. The ‘most social’ CEO on LinkedIn was Gymshark founder Ben Francis (367.5k followers), while Improbabale’s Herman Narula (10.1k followers) was the most active CEO on Twitter.
   
• Earned media profile also correlates with fundraising success: Of the 20 UK unicorns with the highest volume of media coverage, 15 of them had CEOs or founders who were the most prominent in earned media. Boohoo’s John Lyttle was the most profiled CEO across print and online channels (718 mentions / £59M raised).
   
• The most media-savvy CEOs appear in nearly a quarter of company coverage: The leaders of top tier unicorns – which raised an average of £1.4 billion – were featured in 23% of their company’s press coverage on average, compared with just 13% of leaders at mid-tier unicorns - which raised an average of £350.9 million – and only 14% of low tier unicorns – which raised an average of £130.8 million.

This wouldn’t be a post-Corona thought piece on marketing without quoting Professor Scott Galloway, but the ‘Dawg’ (as he’s known on the Pivot podcast) has got an interesting line on this: “‘Entrepreneur’ is a synonym for ‘salesperson’, and ‘salesperson’ is the pedestrian term for “storyteller’.”

In other words, successful leaders are those able to articulate their vision and values as part of a coherent narrative. A story capable of capturing people's imaginations ­– whether that be employees, investors or potential customers. 

Despite the many, many hot takes you’ll have read in the last month, ChatGPT isn’t going to sell anything to anyone anytime soon. People buy from people – and nowhere is this more important than in the startup world. When investors put their faith (and capital) in an early-stage business, more often than not they’re putting their faith in its founder.

A startup may not have thousands of customers, but if their leader has hundreds of thousands of followers online, that’s a great proxy for potential future interest and the size of its addressable market. 

At a time when businesses are scrutinising budgets amid a choppy economic environment, investing in personal brand might just deliver the biggest bang for their marketing buck.

Darryl Sparey is Managing Director at Hard Numbers.