What Exactly is a Challenger Brand and How Can My Startup be One?

Guest post by Dan Salkey.

Dan is the Co-Founder of °Small World, an on-demand marketing service that scales with your startup as you grow. They’re helping ambitious brands by re-thinking how an agency should work. They help grow businesses from Seed to Series C, building your brand and driving performance along the way. 

 

TLDR

  • Challenger brand strategy can be argued as a must for startups 
  • Ask ‘stupid question’s of your category, consumers and product offering
  • Have a strong sense of identity that doesn’t follow consumer or category trends
  • Have an opinion, don’t sit on the fence and remind people about it
  • Do ‘cool sh*t’ that communicates your brand outside of traditional media

 

Picture the scene, you’re at Web3, cocktail in hand at a conference mixer, a high flying co-founder is chewing your ear off, he mentions how his startup is a challenger brand with a clear lighthouse identity that has the intelligent naivety to succeed. You sigh, you’ve entered – the buzzword zone.

 

Jokes aside, I’m a bleeding heart challenger brand disciple. My personal belief is that it’s the most exciting set of strategic principles for brands to follow and if you’re an early stage startup likely the only brand strategy to follow for success. 

 

Challenger brands are often brands in a hurry. So no wonder so many startups & scaleups naturally adopt challenger brand thinking. 

 

First to dispel some myths – a challenger brand can be a business of any size (scrappy startups to massive conglomerates, any age (new businesses to century old institutions) and any corporate makeup (founder-led organisations to those run by boards or committees). Being a challenger, like with anything related to brand, isn’t a static thing but rather a relationship you have with your consumers. It’s a shared state of mind within the business that you then communicate to the world through your product, place, price and promotions – simple. 

 

So when do you know if you need to adopt challenger brand principles? The answer is if you’re any other place but first. If you’re not leading the category you can’t afford to follow the same patterns of the Market Leader, they’ve got more money and resource than you so can outcompete you if you use the same tactics. 

 

A challenger is a brand that therefore takes it upon themselves to have a 10x different point of view or a 10x different product to anything on the market – they don’t maintain, they ‘disrupt’ *queue eye roll*. 

 

That’s already enough of an explanation to call bull*shit on any ridiculous merch hoarding, fund raising, matcha drinking obnoxious founders who baffle you with buzzwords. Now how about we ‘De-jargon’ a few other terms so your startup can be different and put challenger thinking into practice.

 

Practice Intelligent Naivety A.K.A. Ask Stupid Questions 

If someone tells you they’re practicing intelligent naivety, first sigh, next read this. It’s basically a fancy, and admittedly lovely term, for asking questions that seem ridiculous. It’s common amongst children who ask why the sky is blue and where babies come from? It’s less common amongst adults as our biases and ego prevent us from questioning everything.

 

When it comes to business it’s a willingness to ask questions of the category you’re in that no one would otherwise ask. For instance Ingvar Kampard, founder of IKEA and one of the most famous challenger thinkers ever, asked a seemingly ridiculous question in 1943. What if we sold furniture that people had to put together themselves? Thus flatpack was born and furniture with modern design was made affordable to the masses. 

 

Similarly Rickard Öste of Oatly asked; what if we made milk but for humans? And the Grondahl brothers of Planet Fitness asked: what if we made a gym for people who hated going to the gym?

Asking stupid questions is actually an art and why the word ‘intelligence’ in Intelligent Naivety is so pertinent. Not all stupid questions will give you brand or product insight but it will get your head outside of the category you’re in and allow you to look outwardly for opportunities to innovate.

 

Build a Lighthouse Identity A.K.A. Know Yourself 

I’m not sure what strikes more horror into my soul; hearing somebody waffle about a Lighthouse Identity with no understanding of what it means or watching the 2019 Robert Eggers film ‘The Lighthouse’. 

 

This one is pretty simple – the lighthouse is of course a metaphor. Lighthouses are stable (built on rock) and great at making themselves seen through the gloom (literally a massive projector). 

 

It’s all about having a crystal clear identity of who you are and what you do as a business, or in the words of first the ancient Greeks and then Drake  – knowing yourself. 

 

Once you know why you exist, what you stand for and what you oppose in the world you then project that identity intensely and consistently to people in the world. You don’t ask for forgiveness and you don’t waver from it. 

 

Wendy’s is a great example in quick service retail – their tone of voice is punchy to the point of nausea and they take risks with the personality that none of their competitors can follow. Oatly again is a strong example. They had a point of view on the world which wasn’t just unpopular, it was non-existent. People didn’t care about Oat Milk, they were apathetic. Oatly had a strong stance that made people care and they’ve never pulled their punches when it came to the dairy industry.

 

The best way for your startup to find who you are is by workshopping it with the key stakeholders in your team, do it as early on as you can and review it every couple of years as the business, cultural and consumer landscape changes. I’m happy to give some advice on running challenger workshops if anyone is interested. 

Take Thought Leadership of the Category A.K.A. Have A Strong Opinion 

The Linkedin bio of most people these days will tell you that thought leaders are everywhere. They aren’t strictly wrong. If you aren’t the Market Leader in your category then the only thing you can lead on is thought. 

 

The Market Leader is the business with the biggest share and distribution. Think Coca-Cola in soft drinks or (despite what many think) Android in mobile operating systems. The latter is perhaps the greatest example of a brand taking Thought Leadership and therefore being perceived as going toe to toe with the Market Leader.  

 

Thought Leadership is really just about having a strong opinion, not sitting on the fence and then using every opportunity to argue your point – from the comment section on social media to national broadcast.Thought Leaders are the brands that everyone is talking about with a sense of momentum with consumers. 

 

Look at George Rawling’s Thursday in dating apps at the moment, by far the smallest player next to Bumble, Tinder and Hinge but making massive waves due to their fresh perspective on the category. 

 

To be a successful challenger you need to carve out your thoughts on the category and ensure you aren’t sitting on the fence. The final part of this article is all about how you deliver those thoughts to your users.

 

Create Challenger Symbols A.K.A. Do Cool Sh*t

Challenger Symbols probably evoke imagery of your brand logo illuminating the sky Batman style, calling for some heroic consumers to notice your brand. But actually it’s probably the most fun and exciting term we’ll chat about today. 

 

Challengers have strong opinions and thoughts but they need to do cool sh*t to snap people out of autopilot and everyday brand mundanity. They create unconventional marketing ideas that capture the imagination in ways traditional media cannot.

 

It could be on the scale of Tesla launching one of their cars into space or something a bit more achievable like Brewdog parading a tank through the streets of Central London to raise awareness for their crowdfund. Or plant based meat brand THIS pulling up a food van outside Saltbae’s restaurant to troll his extortionate prices.

 

These are our favourite briefs to work on at °Small World. It’s the perfect example of brand building which doesn’t have to break the budget. It’s the sort of PR’able marketing that drives awareness and makes your acquisition campaigns function more efficiently. 

 

So there you have it, a bullsh*t free glossary to Challenger Brands. Next time a fellow founder or Linkedin famous brand strategist tries to slide into your inbox with chatter about challengers you have the tools to talk sense. More importantly you’ve also got a basic guide to how you can make your startup more ‘Challenger’ today, a process we at °Small World are personally more than happy to help guide you through.

 

You can get in touch with Dan at dan@smallworld.marketing or on Linkedin.

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