Why We Decided to Invest $48k in PR for Launch
Of the tens of conversations I’ve had with other founders, the most visceral reactions are around PR. I’ve found this fascinating for several reasons, chief among them because I’ve been wrestling with the decision of whether to invest in PR for our launch.
After talking with the experts (founders, investors, Heads of PR, PR agencies), researching the beauty industry, and reflecting on my own experience, we’ve decided to partner with a PR agency (Azione) for launch.
This is a huge commitment for us: not only from a financial capital perspective ($8 per month for six months; $48k total), but also from a energy, time, and mindshare capital perspective.
As a cash-strapped startup that is pre-revenue, this is one of the few bets we are making for launch. And this decision wasn’t taken lightly.
Ultimately, I believe that the investment in PR is less costly than missing out on the additional brand awareness and sales we’ll generate with PR.
For you data nerds, we’ll make $100k+* more in the first six months by investing in PR than we would if we didn’t invest in PR.
*As a quick and dirty calculation, I’m doubling the amount from $48k to $100k to account for other forms of capital (energy, time, mindshare) that would be dedicated toward PR.
Based on my conversations with other founders and investors, I’ve distilled the common reasons why startups decide to forgo PR for launch and my rebuttals:
PR doesn’t work.
- The prevailing reason startups forgo PR for launch is because they don’t believe it works. Many founders don’t believe PR converts and acquires customers.
REBUTTAL:
- Most don’t understand the purpose behind PR. PR should drive upper funnel brand awareness and credibility. It should not be looked at as a lower funnel conversion channel.
- I’ve talked to many people who are solely focused on press hits when it comes to PR. This is a short-sighted perspective that is solely focused on the output (i.e. # of placements) without understanding the value of the input (i.e. the strategy).
- PR isn’t about getting on the front page of NY Times or Vogue (although that’s amazing if you get that — I want it too).
PR is about uncovering your place in the market and crafting your strategy: What are you? What is the purpose behind your brand? Who are you going after? Why should people care?
- Once you distill your strategy, then the focus shift towards getting your brand and your products in the hands of the right people (i.e. editors, outlets) to share with their audiences.
PR works, but PR agencies don’t.
- The second prevailing reason startups forgo PR for launch is because they believe PR works, but PR agencies don’t. Their intended path is to hire a PR freelancer at a cheaper cost.
REBUTTAL:
- The thought of hiring a PR freelancer who’s formerly been in a leadership position at a PR agency or in a Head of PR role at a relevant brand for 25% of the cost sounds enticing. Let me tell you, it’s too good to be true.
- As I’ve come to understand, a lot of PR is heavy lifting and grunt work: creating lists and seeding product, crafting pitch angles and pitching media outlets, following up.
The proper PR setup requires a village to be successful and can’t be sustained with a one-person show.
- When it comes to selecting the right PR agency, you need to have an extreme vetting process. I evaluated 20+ PR agencies, spoke via phone or in-person with 8 agencies, had 2–3 follow-up calls or meetings with the final 4 before selecting the right partner. This was a 3-month process from start to finish.
After selecting the right partner, that’s when the real work starts. Like any employee or partner, a PR agency needs to be set up for success and held accountable. You need to manage them effectively.
We’ll invest in PR later.
- The third prevailing reason startups forgo PR for launch is because they believe it’s too expensive and they need to be scrappy for launch. Their intention is to invest in PR after you achieve product/market fit.
REBUTTAL:
- You only get one shot to launch. And you better launch in the right way. Sure you can do a “soft” launch and test consumer appetite to see if there’s traction before doubling down.
However, this is a dangerous path because this is what I call “hedge” mentality.
- Hedge mentality is when you’re hedging your bets and playing not to lose, instead of playing to win. Hedge mentality is when you’re creeping out of the gates and fearing failure instead of visualizing the success you’ll have upon launch and driving toward that vision.
The danger is that the hedge mentality leads to a fear of failure mentality that permeates throughout your culture and into everything you do. When you play from that position, you will fail.
- Listen, I’m all about the “iterative” approach and being scrappy. With that said, the hallmark of an entrepreneur is to take courageous bets — believe in and act on something that very few people see with the clarity that you see at that stage.
You need to fucking go for it because you may not have that opportunity to do an official launch to follow up your “soft” launch from a few months prior. The goal for launch is very simple: to launch with a brand that you’re proud of. And if PR is necessary to achieve that goal, then you should find the means to invest in it for launch.
Investing in PR is expensive.
Investing in a PR agency on a monthly retainer for a defined time period is very expensive. Investing in a PR agency on a monthly retainer for a defined time period when you’re a cash-strapped, pre-revenue startup is insanely expensive. There is no getting around this. We had to make some serious concessions in other areas of our business to be in a position to invest in PR (i.e. we’re not paying for office space, none of the co-founders have taken any salary since starting this last January, etc.).
Ultimately, the decision to invest in PR for launch is a personal one.
The more I learn, the more I realize that there are very few black/white, right/wrong decisions. Most decisions are gray decisions that are personal to your circumstance.
For Panacea, we decided it is best to launch with PR because we’re entering a crowded market. The beauty industry is an exclusive community — if you’re not on the “in,” then you’re an outsider.
The opportunity to leverage relationships that our PR partner has developed over many years with the right tastemakers in the beauty industry is absolutely critical for us to rise above the noise and gain consumer mindshare.
While this dynamic is apparent in our industry (for good or for worse), it’s not true of most industries. I use this as an example to further illustrate that decisions like whether to invest in PR or not are deeply personal.
I recommend any Founder/CEO or company to fully understand the dynamics of their business and industry in addition to their launch goals before making a decision on PR.
*Thanks to Leland, Co-Founder and President of Azione for reviewing a draft and providing feedback. Excited to work with you and your team!
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This article first appeared in www.medium.com
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