Are You a Startup or a Challenger Brand?

Brand Marketing, Brand Trust

If you’re an entrepreneur looking to start your own business, you probably already have an idea of what you’re up against. There are millions of different companies and brands in today’s modern society, with more and more continually emerging. For those looking to do more than just branch out into the field, it is crucial that you learn about a challenger brand if you fall into this category and what benefits it can bring in your journey as a brand.

So, What’s the Difference?

Every brand has a mission and an individual message they want to convey to their target audience; however, not every brand is considered a challenger brand. So, what’s the difference between a startup brand and a challenger brand?

A startup brand “is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market. By its nature, the typical startup tends to be a shoestring operation, with initial funding from the founders or their friends and families.”[1]

A challenger brand is primarily defined by a mindset — it has business ambitions more significant than its conventional resources. A challenger brand is prepared to do something bold, usually against the existing conventions or codes of the category, to breakthrough. Think of Ben & Jerry’s vs. Haagen-Dazs, Sam Adams vs. Budweiser, or Apple vs. Microsoft — The Challenger Project.[2]

Every startup has a lot of obstacles to face, especially when a brand is just starting out. Entrepreneurs do whatever they can to refine their idea and bring their concepts to life while also trying to make their brand appealing and valuable to other potential investors and leaders. Running startup brands are generally taxing but can also be rewarding when successful results are achieved. It’s one thing to have a brand be noticed, and it’s another to have a brand evolve and remain relevant amongst industries that are constantly changing. If you’re looking to set your brand apart from others with a whole new mindset, then there are several ways to utilize your resources in order to become a successful challenger brand.

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The Top Three Criteria for Challenger Brands

Three important components for brands to go from a startup to a challenger brand: being a middle performer of the industry with enough experience to break through; having grit and ambition to go above and beyond your limits, knowing you are different than others; and sharing an aspirational vision without boundaries.[3]

1. State of Market

Being a challenger doesn’t necessarily mean you have to be the number one brand out there, and they aren’t niche either.

2. State of Mind

Challenger brands have their own distinct mindset that separates them from other brands, making them stand out from the competition even when their ranking is somewhere in the middle. Two key characteristics of the challenger mindset include:

  • Ambitions that exceed their conventional marketing resources
  • Adapting to the marketing implications of the gap between ambition and marketing resources

Most brands starting in the industry have motivation and ambition, but these traits aren’t enough to become successful. More often than not, brands make the mistake of believing that having a strong will to keep going with a designated marketing plan will eventually lead to desired results. However, this tends to lead to the downfall of small brands the majority of the time. Rather than biting off more than you can chew, you need to be willing to adapt to taking on new strategies and behaviors to fulfill an ambition.

3. Rate of Success

The actions and steps taken during the marketing process contribute to the significant and sustained growth of challenger brands. With industries and markets constantly changing, this pushes brands to step out of the comfort zone and challenge the status quo to keep it going. Even if it means going against their own practices, products, and services, challenger brands go above and beyond the limit and do anything it takes to maintain growth while also keeping strong relationships and bonds with their consumers.[5]

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Adopting the Challenger Mindset

According to IKEA business leader, Michael Hay, there are four essentials to strategies when it comes to recognizing and delivering change closer to success:[6]

      1. Pressure for change
      2. A shared vision
      3. Capacity to translate to execution
      4. Realistic work plan

In today’s startup environment, which is extremely overcrowded, innovation is key. To challenger brands, it’s more than just about hitting the numbers. It’s about utilizing your creativity and entrepreneurial skills and maximizing marketing strategies as you carry your brand to success. No longer are businesses competing against each other as much, but more against the categories they’re placed in and the expectations of what a customer experience should be like.

Culture is a massive part of the challenger mindset, shaped and cultivated by our mission, vision, beliefs, and behaviors. Culture drives challenger brands to think outside the box as consumers get a more transparent look at the people behind the brand and the story they tell. As you navigate your way into the industry, ask yourself what you want to get out of the brand and what you want others to get from it. Challenger brands today means not only transforming the world of B2B and B2C but the ability to influence our daily lives and the way we communicate through their innovation. Whether your brand is small or large, any brand can adopt a challenger mindset, and if you’re looking to do more than just produce numbers and want to truly make an impact, you may just be on your way to becoming a challenger brand.

[1] Fontinelle, A. (2020, September 16). What exactly is a startup? https://www.investopedia.com/ask/answers/12/what-is-a-startup.asp

[2] Eatbigfish. (2019, December 06). What is a challenger brand? – the challenger project: The home of challenger brands. https://thechallengerproject.com/blog/what-is-a-challenger-brand#:~:text=A%20challenger%20brand%20is%20defined,the%20category%2C%20to%20break%20through

[3] Eatbigfish. (2018, August 31). 3 types of challenger brand strategy – the CHALLENGER project: The home of CHALLENGER Brands. https://thechallengerproject.com/blog/2016/challenger-brand-strategy

[4] Ames, C. (2020, November 19). An introduction to challenger brands. https://www.emotivebrand.com/challenger-brands/

[5] Morgan, A. (2009). Eating the big fish: How challenger brands can compete against brand leaders. Hoboken, N.J: Wiley.

[6] Ames, C. (2020, November 25). Challenger brands: B2b challengers. https://www.emotivebrand.com/b2b-challenger-brands/