I've been in product management and marketing roles in several start-ups now and I would say that it specifically depends on what you're selling and the associated sales process. For those companies with a considered purchase process (think B2B sales with higher price points and a long sales cycle), I would say demand generation is way more important in the early days for budget spend and you try to approach brand building in more of a guerilla mode, especially given all of the social media outlets of today. If you're a B2C company or a B2B company that looks like a B2C company with a sales process that is more high-volume transaction oriented, you have more things to consider. For example, I think building a brand is absolutely more important and probably 5 years ago I would have said put your spend in brand building - things like PR, etc. Today, however, I would still put your limited budget in direct marketing and leverage social media for the brand. However, I would probably direct marketing that also simultenously builds my brand - e.g. online display, email, off-line direct mail, etc.

RE: Both, but I must agree with Ed - Brand is how you will distinguish your offering from your competition

First, a CMO at a startup??? Ok, I won't digress.

As Tom says, demand generation is the lifeblood of a startup. Without it, there's little likelihood of sales and, as the saying goes, nothing happens until someone sells something!

That said, today's world affords marketers of all stripes fantastic branding opportunities that can also drive inbound demand. Putting together contagious content (http://bit.ly/22ixGt), developing a viral video (http://bit.ly/4mbXKO), blogging, SEO, and engaging with the social community and providing expertise wherever the community exists (your facebook fan page, LinkedIn Groups, Ning communities) all help drive brand awareness AND customer traction.

The bottom line is that, with Social Marketing now front and center, the traditional walls between branding (or "awareness") and demand generation are falling right along with all of the other boundaries that are breaking down within the broader realm of communications.

Businesses (especially in a B2B or Complex Selling environment) who employ the right tools to engage in the conversation, steer it back to their own "tents" (website, facebook page, etc), and convert and nurture a prospect until ready to talk to sales have a key advantage in getting both branding and demand generation right.

I believe the two work together. In my experience with small businesses and start-ups, it has been necessary in many instances to truly determine the value proposition of the company and its products and clearly communicate it (brand). From that new starting point, demand generation was facilitated because of more focused brand messaging and positioning.

I agree with Scott Mercy, startups don't need CMOs, they need founders. To paraphrase the quotable Peter Drucker, the purpose of a business is to create and satisfy customers.

As a startup, you begin with a budget of $0 and virtually no awareness. Brand building is leveraging the reputation of your team or demonstrating product/service prototypes to early adopters or creating affinity around a business need. Lead generation is leveraging your contacts to identify potential early adopters.

Brand building and lead generation are both important, but subservient to cash management. That's why startup founders are always scrambling.

Chicken [Brand efforts] or Egg [Demand generation efforts]? Which came first?
In my experience, with small businesses, success is founded on doing both. How many times has a potential been directed to a product/service/website only to be disappointed?
Social media, (and I think Scott is 100% right when he says the traditional boundaries here are disappearing), is a great tool, esp. for the limited budget to do both simultaneously. Blogs, fan pages, web events and other inbound marketing tools are a great way to talk about your brand and create interest amongst community members, which in turn leads to more quality focused lead generation.

I think that the separation is becoming less distinct. A brand is not a logo or a tagline, a brand is the collection of experiences and associations we have with a company or service (http://digitalbodylanguage.blogspot.com/2009/07/logo-is-not-brand-b2b-marketing-and.html).

Demand generation is fundamentally the science of ensuring that a potential buyer moves from awareness/education, through to solution discovery, and then to validation. At each step, it is the prospect's experiences and associations that cause him or her to either move forward in his/her buying process, or not.

The big difference is whether, in a resource-strapped company, one should work to influence your brand perception broadly (a TV ad) or narrowly (a direct phone call from a founder), or somewhere in between. As a company is small, narrower is often best, but as it grows, the broader approaches make more sense for marketing to work on (although maybe not a TV ad, but I digress...).

Steve

Brand first. Brand first. Brand first.
I guess you can tell which camp I belong to. Considering:

1- Your brand is an emotional response that your product and service evokes in your customer. Therefore I think its very important to get it right from the get go.

2- Whether you go through professional branding exercise or not you are establishing your brand with every move you make. Every piece of information that goes out of your company including all demand gen. activities establishes your brand.

3- Once you start the demand gen. activity whatever image you establish its going to register in the mind of the audience as your brand. First impressions are everything.

4- Branding can always be done in stages and doing some basic branding exercise is not going to take too much of your demand gen budget.

I recommend that its better to have your brand in place before you start the demand gen. activities.

Demand generation - it's not even close. You can generate demand without a brand, but without demand you're toast.

The exception is if you have an audience-driven business (like Twitter or Facebook) - but if you're going that route you need to have a LOT of external funding. Since we're presuming limited budget, I'm going to assume that's not the focus of your startup.

I'm the President of a startup and I strongly advise focus on demand generation.

Branding does not bring in revenue, which is imperative for businesses on shoestring budgets. Post great content. Work the phones. Nurture deals. And certainly set up lead scoring so you can focus your energies and limited resources on the ideal opportunities.

Good luck,
Jeff Ogden, President
Find New Customers
http://www.findnewcustomers.net

It's an academic question. Branding and demand generation must be performed simultaneously. No start up will succeed without doing an exceptional job at both (in my book success is defined as sustaining an annual revenue run rate of greater than $50M and pretax net profits of greater than 15% return on equity). The more interesting question is how to successfully manage to do both simultaneously. The answer lies in balancing the scope of both activities to produce optimal outcomes in cost and revenue. As we say, marketing in a startup is like changing a tire on a moving car. It can be done successfully, but you better be creative and you better not get distracted.

i have run several startups, and presently involved with one now, demand generation is the key. you need to know who your potential customer are, and how to reach out to them. i have seen to many "build it they will come" strategies, and of course failure.

Have you placed your bet on a product with no demand? We call that an "idea."

You are already in a losing position if you have to generate demand. If you are offering a "me, too" solution, then you need to have a much better offering.

Assuming there is existing demand for your offering and not a lot of competition, you may simply need to bring awareness to your existence in the eyes of those with a need. Someone with the corresponding need/demand will respond if you get in front of them. Think about it...when you have a real need, you tend to notice potential solutions.

Branding is a result of loads of money being poured into advertising and/or having lots of satisfied customers.

There is something to be said for the saying, "If a product won't sell without advertising, it won't sell with advertising."

The saying is "Find a need and fill it." Not, "Have an idea and cram it," which is what "generating demand" brings to mind.

So my suggestion is that the answer to your question is "neither."

What is more important is picking the right product/service to begin with...one with a big market and existing demand. If you hold the product out in your hand and people grab it and replace it with hundred dollar bills, you are on the right track...without generating demand or branding.

Over the years I have seen small and large companies changing the mixture between brand and demand. In the late 90's, there was a lot of brand spend (commercials on the Super Bowl program without hope of return). In 2002 brand spend cratered and demand was king. The best solution is a combination of both. Do enough brand (messaging) so that you actually have one that includes what you are and what differentiates you. Then take that to the market and create demand. Do not market too broadly. If there are 1,000 prospects in your market, market to the best 500 twice, not all 1,000 once. Mix the media! Multi-touch, multi-media and multi-cycle marketing multiplies results! For start-ups or small comanies - Brand: 10 - 20%, Demand: the balance.