Bad Publicity - How Good Press Coverage Can Be Bad For You

 
Bad press can severely damage a company, but I found out that good publicity can also damage a company.
A friend I know was working at a startup that became well-known. The marketing VP did a very good job of keeping them in the public eye. They were regularly written about in the trade press. They were on Sunday newspapers’ ’hottest startups’ lists. They even won awards. But this publicity was bad for them in the end.
The publicity was aimed at gaining customers and making it easier for them to get VC funding (frankly, I think sometimes it was aimed at VC funding alone). In this respect it worked well. The problem is, the publicity was consumed internally too.
Everyone would read what was written about them in the trade press and in the newspapers. In company meetings, the coverage would be quoted and used to support the proposition that they were tremendously successful (just not yet profitable).
All the heady talk went to some staff members heads. They started to believe that they were the very cream of the crop. They crossed the line from confidence to arrogance. This made them harder to manage. It also made people resistant to hearing criticism. It’s very hard to tell someone that they need to change and listen to customers, when they’ve just read a flattering review of the company in a Sunday newspaper. It’s hard to get people to focus on the mundane issues of fixing software bugs, when they’re reading how great they are in the trade press.
The publicity contributed to poor decision making borne of hubris. Instead of acting cautiously and building a new product line using partnerships and through customer feedback, they tried to do everything themselves and offer a complete product to the market. They didn’t listen to critics inside the company who cast doubt on what was being attempted (why should they listen when they were a ‘hot startup’). They didn’t listen to negative feedback from major prospects (they were confident they would ‘get it’ later on). But in the end, the market didn’t want the product line and its failure severely damaged the company.
They might still have made the bad decisions had they not had the publicity, but it’s my belief the publicity bred over-confidence in their abilities. It made them resistant to change. That is killer in a startup.
At the end of the day its not about whose in ‘hot startup’ lists in various publications. Very few companies manage successful exits. Full stop. This is a risky business and to be successful you have to stay focused on what it is that gave you the great publicity or the success thus far. Humility is essential. Hard work is even more critical.
That's why with MassChallenge there's been press coverage but we don't rely on it for marketing. We've met with around 3,000 people. Most people have met our staff and talked to us directly and people have found out about the competition through word of mouth. We're actively using email, social media, and partners to help get the word out. At no point have we been complacent because we know at each turning point there is even more work ahead. We're lucky to have a hard working staff and even more supportive community that believes in our mission. We want entrepreneurs to win. And to win you have to humble. Full stop.