Can I Trust You?

How new companies borrow credibility

Hello to every unicorn in the galaxy.

I moved to a new town recently and wanted to sign my daughter up for piano lessons.

There’s a piano teacher who shows up at town events for kids and hands out business cards. I talked to her a few times and she seemed competent and experienced. I kept her card and finally called her to schedule a first lesson for my daughter.

We talked at length about my daughter’s personality and speculated on the right teaching approach. The piano teacher showed a depth of thought and care that I really appreciated.

But - two days before the first lesson, my neighbor mentioned that her daughter had been taking piano lessons from a different teacher for a year and was having a great time.

So what did I do?

I canceled the lesson with the teacher who had marketed herself to me and schedule a lesson with the teacher my neighbor uses.

There was practically nothing the teacher doing outbound marketing could have done to convince me otherwise.

Let me tell you another story:

At a previous company, I saw a senior executive throw one of his reports under the proverbial bus to the CEO. Instead of taking responsibility for his team, he sacrificed someone as a scapegoat. I lost trust in that executive entirely and it became the defining characteristic of him in my mind whenever I think of him (and that was 8+ years ago).

The lessons here:

  • Trust is critical to growing a business

  • There are different levels of trust

  • Trust can’t be re-built quickly

Today’s growth strategy is TRUST.

Growth stage: Any

Difficulty level: Medium

"Trust is like the air we breathe — when it’s present, nobody really notices. When it’s absent, everyone notices."

Warren Buffet, rich guy

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How To Build Credibility Quickly

Part of the reason that every startup seeking funding wants to get into Y-Combinator is the same reason every pre-med student wants to go to Harvard:

Borrowed credibility.

When a prestigious brand vets and effectively endorses your company, it becomes a heuristic that others will use to save time in the future.

A big YC logo on your new website tells investors that your company is “safe” (insofar as a pre-revenue company can be a safe investment).

The point is, the YC label is a coveted form of borrowed credibility that creates a virtuous flywheel of credibility for new startups.

  • Makes it easier to find other investors

  • Makes it easier to get customers

  • Makes it easier to get introductions

  • Makes it easier to get media exposure

  • And so on…

Of course, it then becomes your duty to make good on that credibility.

Here’s a 4-step framework to establish credibility quickly:

  1. Borrow credibility

  2. Minimize risk

  3. Capture positive feedback

  4. Keep your promises

Just like no one wants to be the first person to get up and dance at the party, no one wants to be a startup’s first customer.

So to start getting customers you need to build a credibility ladder.

You’ll start by borrowing credibility.

Borrow Credibility

Affiliations with Reputable Accelerators or Incubators: being a part of a recognized accelerator or incubator such as Y Combinator, Techstars, or 500 Startups can lend credibility to your startup.

Partnerships: Forming partnerships or collaborations with established businesses or organizations can lend instant credibility. This could include everything from tech partnerships to co-marketing agreements. Just don’t expect them to help you scale.

Get Endorsements from Industry Experts: Finding a product advocate within your industry can be a powerful growth accelerant. Read how Tweethunter partnered with an influencer.

Press Coverage: Positive coverage in reputable media outlets can provide a significant credibility boost. Reach out to journalists who cover your industry.

Awards and Certifications: Winning awards or earning certifications in your industry can provide a signal of quality and credibility.

Advisory Board: Having a well-respected advisory board can significantly enhance your startup’s credibility. If you can attract industry leaders or prominent academics to your advisory board, their reputations can lend your startup added credibility.

Transparency: Be open about your processes, your team, your vision and mission. This can help build trust and credibility over time.

Professional Website and Branding: A well-designed website and professional branding can go a long way in building credibility.

Minimize Risk for Early Customers

The biggest risks for early customers are a loss of time, money and status.

You need to:

  • make it as easy as possible to adopt your product

  • minimize financial risk with a powerful guarantee

Wedge products work so well because they address a specific need and are usually easy to implement.

Capture Positive Feedback

With your borrowed credibility, minimized risk and strong guarantee, you can now attract some customers.

If paid customers are a challenge, go the free route.

Provide products or services in exchange for testimonials or case studies.

This allows you to build a library of social proof.

Keep Your Customer Promises

Otherwise known as “do what you say you’ll do,” now you need to deliver on what you’ve promised your users.

Without this, borrowed credibility will wear out and you’ll fail to build a real business.

Going back to that initial piano teacher - that example illustrates how powerful a single source of borrowed credibility (in this case word of mouth) can be. It outweighed the many compelling conversations I’d previously had with the other teacher.

And never throw people under the bus.

✨ I hope this helps you in your growth journey.

-Brian 🦄

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