Five things you should know about Dennis Baldwin
It’s a venture capital firm. No, it’s a marketing company. Wait, it’s a talent recruiter. Actually, Breakaway is all of the above. And, yes, after doing business as Breakaway Ventures, then Breakaway Innovation Group, it’s just Breakaway these days. How does Breakaway chief executive Dennis Baldwin keep track of his company’s many interests — not mention its many names? Globe reporter Callum Borchers chatted with him recently. Here’s what he found out:
1. Baldwin founded Breakaway as a venture firm in 2006 and had a near-instant hit — his first investment was in the online retailer Rue La La, which was acquired in 2009 for $350 million by GSI Commerce, which itself was later bought by eBay. But just as quickly, he discovered startups need more than money.
“What we saw was that getting the capital was just the beginning,” he said. “Particularly as consumer-facing companies, they really had to go about the challenge of building their brand. We developed the noninvestment portions of our business organically because the companies we worked with had needs we couldn’t find good solutions for.”
2. Breakaway’s best-known startup investment might be IdeaPaint, the maker of dry-erase paint that seems to cover every inch of wall space in Kendall Square and Boston’s Innovation District. Baldwin said branding was the key to distinguishing IdeaPaint from similar products.
“Everybody else was saying, ‘We make a dry-erase paint, and it lasts this long and costs this much per square foot.’ What we said was, ‘How do we create a brand that stands for more than just dry-erase paint?’ The concept was really a brand that stands for creativity and collaboration. We spent a lot of money and energy early building a brand, to the point where many people thought IdeaPaint was a much bigger company than it actually was.”
3. Baldwin began his career as a management consultant at Ernst & Young, advising companies in a wide range of business sectors. He said that’s when he “fell in love with brands.”
“When you see a brand like Harley-Davidson, and you see the loyalty consumers have to a brand like that — it’s almost religious. It’s a really powerful thing, and you see the impact on the bottom line. Same goes for American Express. People don’t say, ‘I’m a customer of American Express.’ They say, ‘I’m a member.’ That was their marketing: ‘Membership has its privileges.’ They created a concept that’s really crazy. I mean, you don’t belong to a club, really. You’re just a customer.”
4. Breakaway’s marketing services are not confined to startups in which the firm has invested. One of Baldwin’s most memorable clients was Velcro.
“Many people think Velcro is a product. They don’t even realize it’s a company. We had an opportunity to help them recapture their identity as a brand. The tagline was ‘Amazing Connections.’ Giving the brand an emotional identity that was greater than just the physical attributes of the product.”
5. Baldwin’s initial conversations with business owners can be awkward, at times. Some entrepreneurs bristle at the notion that a great product won’t sell itself, and don’t consider marketing a priority. Those people either change their minds or go looking for money elsewhere.
“Having a powerful brand is the most important and sustainable competitive advantage that a business can have. Patents expire, competitors can knock off products, markets change, consumer behaviors change, but people who have built powerful brands have a lasting edge over people who just make products. Powerful brands trade at a premium.”