Why startups still need PR during an economic downturn
According to the news, it’s gloomy days ahead on the economic front with ongoing geopolitical turbulence, supply chain disruptions, rising inflation and the very real possibility of a global recession in the next 12 months. A scenario like this usually leads to Indian businesses – especially cost-conscious startups – reducing their public relations (PR) spending to cut costs. Ironically, this is the time when good PR is most needed as it can create the positive impact that brands need to weather the storm.
Staying top-of-mind by being consistent
In 2021, India displaced the UK to rank third in the list of countries that produced the most unicorns in the world, underscoring just how competitive its Startup ecosystem is. But with the volatile global markets causing a slowdown in venture capital for Indian startups, the competition for funding is fiercer than ever with a shrinking pool of funds and over 65,000 Startups now recognised in the country. One way for startups to distinguish themselves is by sustaining a consistently positive public narrative.
Among venture capitalists and investors, part of their due diligence process is to research whether a prospect has a legitimate offering and a good reputation, as well as whether the founders or the founding team are thought leaders in their respective spaces. Having a solid media presence – especially in top-tier media – supports a startups legitimacy as it implies that the media has done an initial round of profiling and found the company both credible and newsworthy. Regular media appearances further bolster this reputation and help the startup increase their share of voice, maintain top of mind recall vis-à-vis competitors, and ultimately own the spaces they are in.
Many startups also think that PR is only necessary on an ad hoc basis for events like funding rounds or partnership announcements. But PR is ultimately about reputation management, and maintaining a good reputation requires sustaining a consistent, authentic, and visible narrative. Every time a business stops PR engagement, they lose the momentum they have built for their brand in the public eye, as well as the relationships they have built with the media – which will take time and energy to rebuild.
Attracting key talent and partnerships
Funding aside, a good PR strategy can help startups in India and beyond solve the age-old talent conundrum. Making the right hires with the right mindset and skillsets not only saves time and energy in hiring and training, but also forms a stable core that the business can depend on to see it through economic turbulence. Half the battle is won if startups can cultivate a reputation that best represents themselves and their goals. People tend to apply to – and stay in – companies that they resonate with.
There are many ways to tell different stories for a startup, especially as it evolves. A startup that has just closed its first 'Series A' round may focus on introducing its founders and product to the public, which could attract experienced talent looking for new challenges. Meanwhile, more established startups may choose to highlight their company culture and career progression opportunities, which could be pivotal to attract high-calibre talent to accelerate growth, overcome funding hurdles and scale the business.
Beyond in-house talent, PR engagement can also open the door to new partnership opportunities for startups, which can lead to fruitful outcomes. For instance, appearing on interviews and speaking at panel sessions gives a Startup more exposure and may attract new business and collaborations with other companies, which are especially valuable when competition is stiff. The more active and visible a Startup is, the more likely it is to be sought out – both by the media and by other companies.
Managing a crisis within a crisis
The last thing any startup wants to have to handle amid a recession is a reputational crisis, especially given how important reputation is to a young startup. A mishandled crisis can lead to employee and business loss, as well as a drop in consumer or investor confidence, which can ultimately lead to a Startup’s downfall if it happens during tough economic times. That is why it is crucial to have a sound crisis strategy on standby – both of which are part of the PR remit – in case the worst happens.
In 2019, one of our clients was the subject of an article in a leading global publication that carried a negative sentiment against the company, suggesting it did not live up to its stated expertise. To counter this, we coordinated exclusive interviews with other key publications and thoroughly addressed the pain points raised in the original article by pitching opinion pieces by the CEO, as well as having him appear on podcasts and profiles. Ultimately, we were successful in correcting the narrative and further cementing the client’s reputation as a proven thought leader in its space.
In India, our client once launched a campaign that sparked suggestions of legal action from a large brand and ignited significant media and public interest. Making the wrong choice in this David vs Goliath situation could have meant disaster for our client, but we were able to conceive a strategy that helped them avoid pitfalls and convince the media to carry their side of the story. This ultimately kept overall sentiment as neutral to positive and averted a reputational fallout without being aggressive or hostile to the other brand, which would have severed any chance of a future relationship.
Adopting a multi-market approach
Startups tend to first build a solid foundation at home before making the leap overseas, but there is no doubt that international expansion is a critical component of many overall growth strategies. Besides expanding a company’s reach, this diversification can also mitigate the risk of decline in the domestic market during leaner periods. But while global expansion is always exciting, it can be tricky as different markets may require a tailored approach, alternate messaging, and a relevant narrative.
More and more tech startups pioneering technology-led global offerings are receiving funding, which increases their capacity for growth. As a result, many are now looking to expand across borders to find new customers in untapped markets. Leveraging PR to devise and execute a multi-market communication strategy to achieve goals such as increasing product or brand awareness, collecting market intelligence or strengthening share of voice thus becomes a business imperative; the role of PR engagements in laying the groundwork for a smooth expansion journey cannot be understated.
For many years, we have been the lead agency for a technology Startup based in India. They have witnessed rapid multi-market growth and now have offices in the United Kingdom, the Americas and Southeast Asia among others. As their global lead agency, we streamline their overall global communications strategies and messaging, ranging from managing some of their regional agencies in international markets to showcasing their products and company updates via different media channels. Our efforts have contributed to them achieving positive brand visibility by appearing in top-tier global media titles, which has led to renewed investor confidence and strong funding rounds.
The show must go on
Traditionally, PR was often an afterthought for startups as it was seen as an optional enhancement. But rapidly changing forms of engagement have changed the way that brands tell stories, and consistent authentic messaging can give a new company the head start it needs to be a success story. Economic winters do not mean that Startups should stop telling stories. Instead, it is an opportunity for the most interesting, creative, and relevant stories to shine brightly in dark times.
Pavan Sahu, is deputy managing director of Redhill