Paul Scrivens says:

A major problem with this phase of the web that many people seem to miss isn’t that companies don’t have a business model, it’s that they aren’t doing a great job of communicating their message and their qualities to users. Look at the survivors from the last boom and what separated them from the rest of the field. (from The Brand)

Overall, this is a great read on branding. His basic point is that having a brand means having a focused, consistent message. But I think Paul’s got the place of a brand in the overall business all wrong here.

Sure Amazon, ebay, Google all have strong brands but so did Pets.com. But Pets.com did not have the business model right. They had a clear message reaching out to a defined group: people who needed pet supplies but hated going to the store. Unfortunately, there weren’t enough people with that need and a willingness to buy online to cover their high overhead costs.

Business model. Before you build a brand, you need a business model. You need to know who your customer is, why they will buy from you, how you will reach them, how you will retain them, and what it will cost you to do all of this. And you need to plug all of this into your revenue – expenses = profit equation to make sure it comes out greater than 0.

Branding is a part of reach and retention of customers. It’s a piece. A very important piece, but just a piece. There are lots of other pieces as well, like distribution. Everyone thinks that distribution is not an issue anymore on the web, but that’s not true. Distribution, in its most generic form means delivering your product to your customers. You may put your service on the web and think you’re done, but you’re only half way there. You still have to get your customers to come to your site. That’s the other half of distribution and if you can’t get that right, you’re business will fail.

So Paul says the biggest problem with many of the new “Web 2.0” (or “dot oh” as Richard MacManus calls it) companies is that they don’t have a clear consistent message about what makes them different—they don’t have a brand. I totally agree but I think it is because they haven’t really figured out their business model in the first place. If they had, they would know their audience and their message and the branding part would come almost naturally.

So my advice is: if you want to build a good brand, figure out your business model first. Know who you are selling to and what will set you apart. From there the rest of the branding will flow quite naturally.