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Indian startups, it's time to shift to 'creative capital'

The Drum 20 Nov 2020 12:30
Time for 'creative capital'

The Indian startup system continues to be one of the most action-packed categories, even in tough times. It is a category where successes and failures exist in equal measures. Rohit Raj, co-founder of The Glitch (a WPP company that recently became a part of the VMLY&R network) makes a case for achieving the mythical sweet spot for startups by making a shift towards ‘creative capital’.

“VC cash can help the brand be seen, but ‘creative capital’ can help the brand be seen and heard,” he says.

“The epitaph of advertising networks will be written by us consultants” quipped a friend of mine who works for one of the big-four ‘transformation’ consultancies in the world.

But as he went on to stake his claim on what he thought was the undoing of network agencies, and the gap that networks left behind which the consultants were looking to plug, we touched upon another gap that was developing in this fast-evolving market and one that a network agency was primed to fill. That of smarter venture capital.

Why Indian startups could be a fertile ground

Data suggests that an average of 23% of capital raised is spent on advertising and marketing. And therein lies the opportunity for us ‘Mad Men’ to wear the ‘Wall Street’ hat and open up their share of that pie. While this is not something new or unique, with a few ‘skin in the game’ advertising agencies already gunning for a share of this pie, the game-changing aspect here would be the power of an advertising network to offer this play.

One may well wonder why an advertising network is needed when VC cash can buy the same clicks to help scale fast, you may ask. If you take the case of any new venture that is starting up, beyond world-beating tech where the delta between you and your next competitor is significant, a brand and only a brand can deliver bigger sustainable returns. And great brands are not built through acquisition campaigns on Facebook, Instagram and Google alone. They generate a product-differentiation to attract a cohort of customers, which they then scale by building a creatively distinctive identity across multiple channels. How a brand expresses itself uniquely and cements a position across different touchpoints is the difference between being seen and being heard. VC cash can help you be seen, but creative capital can help you be seen and heard.

The venture who has a brand baked into the idea early enough is most suited to wear the unicorn title. Bringing in the right brand building partners early on will help the entrepreneur shape the brand creatively right at the start and not wait till they raise their Series B funding to bring in the big brand-building guns.

Nobody is better suited to partner in this journey than a full-service network that has the power of brand building, knowledge of distribution on channels, the stream of big data, learning and insights across the years and the capabilities to deliver all this, at scale. In a marketing capital model, a startup treats this expertise as a capital investment in exchange for equity in the venture at an early stage.

What’s left to see is who makes the first move. Will it be VC firms looking to build a creative capital offering by bringing a gamut of brand builders on board or will advertising networks finally disrupt themselves and look beyond being another service industry player

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