Is there such a thing as bad publicity?

By Sahar Meghani

Just this month, a new study at the Stanford GSB looked at book reviews in the New York Times and found that even when reviews were unfavorable, authors that were previously unknown saw a 30% - 50% bump in sales, simply because the PR generated product awareness. In a startup context, though it is often argued that obscurity can be an asset for entrepreneurs (allowing for learning and failure in private), I generally tend to agree with the saying that all publicity is good publicity!

Of course, startups must focus on their core competencies, refine and test their hypotheses and iterate after learning from customers and I am not advocating shortchanging any of those steps. However, from a marketing and customer acquisition standpoint, the benefits that a high-profile launch at SXSW or at TechCrunch50 can provide are unparalleled and extremely rare. Startups can see a dramatic spike in early adopters, get investor attention and gain legitimacy which can be critical for attracting talent and developing relationships with partners, vendor and suppliers. The resulting momentum can also serve as a powerful motivator for the team members.

Today, when pivots are almost a necessary step in the startup process, I question the assertion that startups only have one real round of PR. When Path, the social sharing startup, released its second-iteration app which included a significant shift in its product, it received tremendous press and experienced a 30x growth in its user base. In fact, the TechCrunch reporter wrote: “There is something about waking up day after day to write about people who take risks; You end up rooting for some of them.” Scrolling through some of the user comments in that article revealed sentiments such as: “[I] didn't care for Path when it first came out, but it's much better and prettier now.” And “I hated the first version, I love this one!” In fact, most of the press about Path is around its improvement. Consumers are being conditioned to be forgiving. I feel that as long as startups have a personality, are transparent, promise only what they can reliably deliver, learn from mistakes, and truly provide value to their consumers, the rounds of PR will follow.

The one instance where I think a public launch strategy could potentially be tough is when a startup is entering a space with an established incumbent and is seen to be provoking or breaking the rules. LinkedIn’s decision last summer to cut off API access to startups like BranchOut, a professional networking startup built on the Facebook platform, that launched very publicly and then violated its Terms of Use agreement, isn’t surprising. Neither is Twitter’s debacle with UberMedia in which Twitter shut down API access. There is absolutely something to be said about operating in stealth mode. However, in the case of BranchOut, I would argue that by publicly launching, the startup has benefited tremendously – monthly users grew 25X soon after launching even though the product in my opinion is buggy and lacking critical functionality. Most importantly, the startup has claimed competitor status and virtually guaranteed a mention in most articles that cover LinkedIn - the results of which could never be matched by operating under the radar.