Proceedings of the 34th Hawaii International Conference on System Sciences - 2001

Corporate Branding of E-Business Ventures

Ulrike Geissler, Markus Will

MCM Institute, University of St. Gallen
Mueller-Friedberg-Strasse 8, 9000 St. Gallen, Switzerland
ulrike.geissler@unisg.ch, markus.will@unisg.ch, and www.mcm.unisg.ch

Abstract dous overvaluations in stock markets – no matter how

Entrepreneurs in electronic markets move in industries
where a strong corporate brand can deliver competitive
advantage through differentiation. It not only facilitates
increased attention. Despite ever-increasing followers
and me-too products, it enables a company to build a
positive image on behalf of the relevant target groups –
be they consumers/customers, shareholders, employees,
or industry partners. This facilitates access to resources
most scarce in early company life stages: capital, human
resources, customers, industry partnerships, and man-
agement knowledge.
Contemporary management literature on entrepreneur-
ship neglects corporate communication to a great extent.
This pioneering article takes a first step to outlining a
framework for brand building by entrepreneurs in elec-
tronic markets. After an introduction of basic concepts
relevant to this topic, we outline today’s key challenges
for e-business ventures. We then introduce a generic
framework for corporate branding, which in a next step is
being applied to e-business ventures.
Keywords. Entrepreneurship; Electronic Markets; Corpo-
rate Communication; Corporate Branding; Framework
1. Motivation and introduction
A good business idea for electronic markets seems to
be the key to success today. Various estimates show that
electronic business will grow enormously. Just in the
U.S., in 2000 trade over the Internet will rise to $251
billion ($109 billion in 1999), services’ revenues will
climb to $43.7 billion ($22 billion), and retail revenues
will be about $38.8 billion ($20.3 billion) [29]. Within
this Schumpeterian “creative destruction” of traditional
business rules, entrepreneurs in electronic markets serve
as one of the key agents [9] - we call them cyberpreneurs.
In electronic markets, time, more than size, matters.
Time to raise capital, time to market, time to hire employ-
ees, time to sell, time to raise capital again, etc. Before
the international technology stocks collapsed in April
2000, Internet-related companies were quoted at tremen-
profitable they were. Competition reached huge dimen-
sions not only in the U.S. but also in Europe and Asia.
After the collapse, the struggle for survival has become
fiercer. Unproven and unprofitable companies operating
in electronic markets have had a difficult time staying
solvent. A few highly praised ventures have already run
out of money; a prominent example is Boo.com. A Web
site for failed start-ups – www.startupfailures.com – was
even launched in early May. Although valuation stan-
dards for Internet-related firms have always been unclear
[33], cyberpreneurs need additional venture and stock
market capital even more, and therefore need to restore
financiers’ confidence and trust in them.
As will be shown, the key to a successful start-up in
electronic markets is to find financiers, customers, em-
ployees, and favorable positions in industry networks. A
prerequisite for that is to attract attention and build a
strong corporate brand. A shift in focus from production
to communications management will be required [46].
First, information overload increases, while the cognitive
capacities of target groups remain limited. A vast amount
of information will never be able to pass through people’s
filter of attention, so cognitive capacity becomes a scarce
resource. Competition for target groups’ attention is
critical for survival. Second, products/services are be-
coming increasingly standardized and interchangeable.
At the same time, markets globalize and new forms of
organization enable an increasingly “virtual” and decen-
tralized creation of goods and services. Therefore, the
dominant companies in the future will be those, which
have a strong corporate brand that differentiates it from its
competitors. Finally, ever-increasing followers and me-
too products hamper product/service differentiation.
Empirical data show that external communication is
seen as one of the most important tasks for entrepreneurs
in general, yet too often neglected [24]. The reasons are
manifold. They stretch from financial constraints to a
lack of experience, knowledge, and communication skills.
Especially young high-tech-companies would rather in-
vest in product development than in corporate communi-
cation [39]. The consequences can be bitter: problems in
raising capital and finding talented employees, an inabil-
ity to implement quick and successful market positioning

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 Proceedings of the 34th Hawaii International Conference on System Sciences - 2001
or development, and difficulties when initially quoting on
the stock exchange or searching for partners with whom
to merge.
Contemporary management literature on entrepreneur-
ship neglects research on corporate communication to a
great extent. The few publications dedicated to the topic
focus mainly on product marketing by entrepreneurs
within brick-and-mortar business (c.f. reviews by [30],
[44], [8]). We want to take a first step in closing this gap.
From the perspective of communications management,
we consider corporate branding to be a key success factor
for cyberpreneurs. Corporate branding refers to the for-
mation, development, and stabilization of a corporate
brand in order to differentiate a firm from existing com-
petitors, and to build up entry barriers for potential com-
petitors. As a manager of J.P. Morgan puts it, the corpo-
rate brand is the DNA of a firm. In this, branding is a
strategic requirement because it has a significant impact
on a new venture’s success in terms of long-term survival.
In this conceptual article we apply a general frame-
work for corporate branding to e-business ventures. We
choose an approach that combines results from inductive
and deductive research. In the first step, we will intro-
duce the basic concepts relevant for this topic, including
electronic markets, cyberpreneurship, and a general
framework for corporate branding. We then outline to-
day’s key challenges when creating a new organization in
electronic markets. Finally, we apply the framework for
corporate branding to e-business ventures.
2. Basic concepts
2.1. Electronic markets
Electronic markets are digital platforms for the repre-
sentation, development, and exchange of tangible and
intangible products and services. Sophisticatedly mod-
eled, these distributed virtual environments enable all
structures and processes necessary for generating knowl-
edge, building intention, contracting, and fulfillment [32].
Thus, by de-constructing and re-constructing value chains
digital information and communications technology (ICT)
have the potential to transform traditional models and
promote new business models and industries. In order to
define the industries operating in electronic markets we
draw on a classification, which divides electronic business
into four industry clusters, based upon the unique ele-
ments necessary for value creation in electronic markets
[52]. First, Internet infrastructure industries cover eve-
rything that serves as a prerequisite for the Web and the
proliferation of electronic business – Internet service
providers, networking hardware and software companies,
Internet backbone providers, line acceleration hardware
manufacturers, PC and server manufacturers, security
vendors, and fiber optics makers. Second, applications
infrastructure industries are comprised of companies
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delivering software products and services necessary to
facilitate Web transactions and transaction intermediaries
– Internet commerce applications, Web development
software, Internet consulting, online training, search en-
gine software, Web-enabled databases, and multimedia
applications. Third, intermediaries generate revenues
through advertising, membership subscription fees, and
commissions – vertical market makers, online travel
agents, brokerages, advertiser, content providers and
aggregators, ad brokers, and portals. Finally, commerce
industries cover companies conducting Web-based com-
merce transactions – e-tailers, professional services, on-
line entertainment, manufactures, airlines, and the like.
2.2. Cyberpreneurs
Entrepreneurship is the process whereby an individual
or a group of individuals create(s) a new organization. It
may be either an imitative or an innovative entry [50]. A
systematic differentiation between independent and cor-
porate entrepreneurs will not be made in this paper.
We propose a cyberpreneur to be an individual foun-
der or a new organization in electronic marketplace, lo-
cated between seed stage and initial public offering (IPO)
or sale.
To turn an idea into reality, it first takes the seed stage
to promote the idea, develop a business plan and the
product or service. Small projects are being executed. At
start-up, in order to market the product/service, an appro-
priate infrastructure for production, sales, and distribution
has to be organized, followed by marketing and, if neces-
sary, a redefinition of the product/service. Market posi-
tioning or development, fast internal growth, and ongoing
product/service development are characteristics of the
following stages. An IPO or a sale enable expansion.
Reaching the break-even point marks the end of the late
stages.
According to these stages, several rounds of fund
raising exist. Usually businesses raise outside capital
several times to finance product/service development and,
later on, marketing and expansion [20]. Especially tech-
nology-oriented ventures require high financial support
for their intensive technological product/service develop-
ment ([53], [14]).
Like all entrepreneurial ventures, cyberpreneurs are
small businesses. In the U.S. a small business employs
fewer than 500 employees, in the E.U. fewer than 250
[54].
Regarding corporate branding, some important differ-
ences exist between entrepreneurs and cyberpreneurs.
Since they face severe competition, the latter are heavily
pressed for time. The need for rapid growth usually re-
quires venture capital. As a consequence, a future IPO or
merger is inevitable. In addition, highly cost-intensive
product/service development or marketing investments
might be necessary. Ever-increasing technological inno-
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 Proceedings of the 34th Hawaii International Conference on System Sciences - 2001
vations and complexity call for sustained investments in
legitimacy.
2.3. Corporate branding
Corporate branding describes the formation, develop-
ment, and stabilization of a corporate brand. From the
perspective of framing theory within cognitive psychol-
ogy [18], a corporate brand can be depicted as a network
of knowledge about the company. It is stored in the hu-
man mind and consists of factual as well as emotional
elements. The amount and quality of that knowledge is a
key factor for the formation and stabilization of positive
attitudes towards a company (trust, commitment, etc.), for
involvement and desirable actions, like purchase.
The brand is reflected in the corporate image as seen
from an external viewpoint. Elements influencing a com-
pany’s image include products/services, financial per-
formance, representatives, management and leadership,
vision, and future prospects [13]. Some elements might
be more important for certain target groups than for oth-
ers; e.g. shareholders focus on financial performance,
products/services and strategy whereas a journalist’s im-
age of the company might be more influenced by repre-
sentatives or corporate citizenship.
Corporate branding aims at generating knowledge
relevant for image building through contextualization.
The company has to provide contextual cues that guide
decision making and inferences. These cues emerge from
repeated confrontations of the target groups with a cohe-
sive set of messages about the company.
2.4. Corporate branding by communications
management: a framework
We consider corporate communication to be the salient
function responsible for corporate branding. It is about
the management of relationships between a firm and its
relevant target groups in order to create and further de-
velop a coherent corporate image. Therefore, communi-
cations management must be involved in creating the
business strategy as well as implementing it. At the same
time corporate brand strategy should be influenced by the
business strategy.
We introduce a generic framework for corporate
branding. Referring to Porter [42], a framework allows
one to identify relevant dimensions of an object or task.
In a given situation, they have to be checked for appropri-
ateness. With this, a framework helps to structure and
analyze a certain problem and find solutions afterwards.
To create a corporate brand, five dimensions can be
distinguished: objectives, target groups and task areas,
media, instruments, and professionalism of management.
The first four elements are derived from the so-called
Lasswell formula which describes a communication act
(”who says what in which channel to whom with what
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effect”) [31]. The last dimension refers to the structures
and processes underlying communication acts.
Objectives. The objectives of corporate branding vary
according to the specific strategic goals and business
models. From a formal point of view, corporate branding
aims at eliciting a certain action from the target groups
(purchase, funding, etc.). To achieve this, the first step is
to draw attention to the company (its existence and name,
business idea, unique selling proposition, etc.) [2]. At-
tention then should lead to the formation or reinforcement
of positive attitudes toward the desired action [10].
Therefore, corporate communication cover a heterogene-
ous repertoire of objectives depending on the specific
case. Possible objectives are persuasion, advocacy, in-
formation, or reputation building.
Target groups and task areas. Target groups are in-
dividuals and groups critical for business success. Their
stakes and, subsequently, actions as perceived by the
company are the reasons for relationship management.
One considers employees as the internal target group and
industry members (competitors, suppliers, consum-
ers/customers), shareholders, the general public, and poli-
ticians as key external target groups [58].
To reach these groups, mediators are crucial. Media-
tors function as gatekeepers, multipliers, or even opinion
leaders within information flows. They may be human
beings, organizations, or mass media institutions.
Whereas gatekeepers disseminate information merely
selectively, multipliers have the possibility of spreading
information to large numbers of people. Opinion leaders
are perceived to be highly credible and competent. They
are often asked for advice and are capable of influencing
others’ opinions and actions. Classic examples are jour-
nalists [40].
Consequently, the task areas for corporate branding in-
clude media relations, marketing communications, inves-
tor relations, employee relations, governmental rela-
tions/lobbying, corporate design, and sponsoring [4].
Several attempts to incorporate public relations into
marketing have been made in the past (see, e.g., [28]).
Yet at least one distinct difference between marketing
communication and corporate communication exists.
Marketing actions focus primarily on customers to sup-
port sales and distribution. Corporate communication is
responsible for everything that reflects ultimately on the
corporate image – it has to cover a wide range of target
groups.
Media. We propose that media are platforms for the
representation, development, and transaction of tangible
and intangible objects (e.g., goods and information) [32].
The underlying communication channels might be tradi-
tional ones like print and broadcast, or new ones like
Internet-based.
The selection of appropriate communication platforms
depends on the actual audience’s media usage and atti-
tudes. A combination of both traditional and new media
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 Proceedings of the 34th Hawaii International Conference on System Sciences - 2001
seems to be necessary. With the growing use of ICT for
business operations as well as for everyday life, strong
corporate brands will be those that best utilize the Internet
infrastructure, including intra and extranets.
Instruments. The instruments appropriate for estab-
lishing a corporate brand vary with the objectives and
target groups. They include news production, campaigns,
advertising, networking, public talks, corporate design,
and sponsoring [58].
In content and application, the instruments have to
meet the audience’s needs and demands. ICT enable the
collection and analysis of interaction data, which facili-
tates individualized and tailored communication with
target groups. Furthermore, the Web environment, with
its well-known characteristics, like interactivity, multi-
media applicability, hyper-textual structure, etc., provides
new possibilities of activating and involving the audience
and creating a brand-building company experience.
Professionalism. Corporate branding is key to sur-
vival when competing for audience’s attention. Hence, it
should be managed professionally. Assuming efficiency
(doing the things right) and effectiveness (doing the right
things) of managerial action [5] to be measures of profes-
sionalism, this dimension refers to the management of the
five classic functions of business administration – plan-
ning, organizing, staffing, directing/leading, and control-
ling [27]. Professional management, then, involves effi-
cient and effective situational analyses, definitions of
alternative actions, selections and controlled realizations
of strategic, and operative programs for each management
function within corporate branding.
3. Challenges for cyberpreneurs
The e-business models mentioned above – Internet in-
frastructure, applications infrastructure, intermediaries,
and commerce industries – represent different industry
sectors each varying in terms of competition, profitability,
etc. Nevertheless, we believe that there are some general
challenges that cyberpreneurs in major Western countries
face when starting a business today (c.f. [45]).
3.1. Internal environment
Staffing. Great business ideas need talented people to
execute them. Excellent staff is crucial especially at a
cyberpreneur’s start-up stage and at expansion. Most
important are people with experience in managing com-
panies and with in-depth industry-specific knowledge.
Until a few months ago, recruiting was not really a
problem for e-business ventures. It seemed to be fashion-
able and attractive to work for those kinds of companies.
An exodus of employees from traditional to young Inter-
net companies was observable. The reasons were mani-
fold, including presumed possibilities to “change the
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world,” human touch, lack of bureaucracy, entrepreneurial
creativity and flexibility, the wish to work for the future’s
“big leaders,” and financial incentives like stock options
[3]. However, times are changing. The latest develop-
ments on the international stock markets prepared the
ground for skepticism and insecurity when it comes to
seeking a job in electronic business. At least young and
unproven companies lost the attraction they had for tal-
ented people. Additionally, the younger a company and
the less it is known, the less trust it has been able to build.
As a consequence, it takes longer to find the right peo-
ple. However, a lengthy search for employees is a disad-
vantage in competitive surroundings where time counts
the most.
Partnerships. By business partnerships we mean all
kinds of usually contractual and/or cooperative business
relationships between a cyberpreneur and other compa-
nies/individuals. Terms like strategic alliances, industry
networks, or corporate partnering relationships are equally
used.
Partnerships for mutual provision of resources have
always been a key to a small business’ success [51]. For
cyberpreneurs they are even more important. High-
growth ventures need to find partners in order to finance
seed, start-up, and further stages, spread the risks involved
with high research and development expenses, confirm
the commercial potential of a company, expand personal
networks, obtain market and management knowledge, and
enable specialization in business processing.
Partnerships are necessary especially with financiers
and advisors (incubators, venture capitalists, and business
angels) and with various industry partners (for develop-
ment, supply, marketing or distribution, which include
value added reselling, original equipment manufacturing,
or system integration). A loss of profit and autonomy,
and complex bargaining processes with multiple partners
might be possible disadvantages of business networks
([48], [12], [1]).
Multimedia agencies provide one example of such
partnerships. They increasingly network with system
integrators, IT-service providers, business consultants,
and telecommunications companies. Alternatively, take
the case of a fast growing software producer. To save
time and money it might be more efficient to shift final
operations, services, and training to distributors. Exam-
ples would be IBM’s “PartnerWorld,” Intershop’s “Solu-
tion Provider Program,” Commerce One’s partnership
with SAP, or Icon Medialab as an “Oracle Certified Solu-
tion Partner.”
Finance. Several sources of finance exist – bootstraps,
friends and family, business angels, private and corporate
investors, and venture capitalists. Venture capitalists are
the most popular financiers of cyberpreneurs today. In
the U.S. and Europe, e-business venture capital funds are
being raised constantly, replacing business angels as the
most important financiers in the past. According to Pri-
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 Proceedings of the 34th Hawaii International Conference on System Sciences - 2001
cewaterhouseCoopers, in the first quarter of 2000 U.S.
Internet-related companies received $10.8 billion by ven-
ture capitalists, up from $1.9 billion in the first quarter of
1999 [43].
Venture capitalists tend to invest only in highly pro-
spective business ideas because they seek to rapidly
maximize their return on investment. Therefore, compa-
nies financed by venture capital are forced to quickly
quote on the stock exchange or sell [20]. Nevertheless, an
IPO should not be rushed because it is accompanied by
further challenges. For example, it requires large num-
bers of additional staff and the company has to provide
insight into its economic figures and deal with sharehold-
ers’ demands and expectations.
3.2. External environment
Stock markets. These financial challenges are re-
flected in the international stock markets. Until April
2000, quickly raising capital was possible. New markets
like Germany’s Neuer Markt, Nouveau Marché in France,
SWX New Market in Switzerland, and the British tech-
MARK emerged. They followed Nasdaq’s example as
rapidly growing, highly overvalued, volatile, and specula-
tive bourses, implying potentially high risks but also
enormous returns for investors. Public interest in stock
market transactions grew even in Europe, and institutional
investors increasingly purchased technology shares.
Today, after the international technology indices have
plunged, unprofitable and unproven companies will fail
medium-term, enabling the high-potential ones to survive.
Furthermore, private and corporate financiers apply
higher standards to new companies’ business plans and
raise their expectations regarding goal performance.
Valuations for credit-worthiness during early-stage and
following funding rounds are becoming stricter; stock
market analysts are becoming more severe judges of fu-
ture perspectives; the international markets for IPO have
frozen; and investors are already rediscovering the brick-
and-mortar “blue chips.”
If these developments continue, they will destroy many
of the start-ups, which bank on venture capital and IPO to
finance their future growth.
Industries. Years ago, ICT marked the beginning of
the so-called digital economy. New rules of knowledge
generation and dissemination, of production, product
design and social coordination are emerging.
Future prospects of entrepreneurship in electronic mar-
kets are ambiguous. On the one hand, current research
data provide evidence of the high potential of develop-
ment and innovation of worldwide e-business, especially
in industries like multimedia, telecommunications, soft-
ware, and microelectronics. The reasons are manifold.
Whereas business-to-consumer (B-to-C) transactions do
not progress as expected, business-to-business (B-to-B)
exchanges keep on increasing [29]. Additionally, entry
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barriers are generally low. Cost-effective industry-
networks emerge. Governmental efforts in financial and
advisory support for entrepreneurs are increasing not only
in the U.S. but also in Europe. Fund raising is much eas-
ier than years ago. Legal restrictions to e-business begin
to shrink, and for many products and applications, for
example unified messaging, technological standards are
still lacking. These and other issues foster competition
and the emergence of new industries.
On the other hand, as already discussed, there is a high
amount of uncertainty about the medium and long-term
success of various business models, markets, market seg-
ments and the viability of certain technologies. For the
majority of cyberpreneurs, the chance of business survival
is expected to be slim. According to Merrill Lynch, about
80% of today’s Internet companies may not survive the
next years [16].
3.3. Implications for corporate branding
These developments make clear that cyberpreneurs
face manifold challenges when starting up. In highly
competitive markets where time is critical for survival,
they have to hire (experienced) staff, raise capital several
times, find customers, and develop stable industry net-
works. Penetration of information markets, and brand-
building efforts seem to be crucial.
At the same time, several constraints exist. First, at-
tracting attention becomes increasingly difficult. Al-
though publicly accessible information is ever growing,
human cognitive capacities remain restricted. In addition,
information is most often vastly dispersed throughout
diverse media and across time. This leads to problems
when the company wants to deliver information. Second,
young founders normally lack management and industry-
specific knowledge. Third, despite a growing number of
venture capitalists, financial constraints exist.
From the perspective of corporate communication, we
consider corporate branding to be one of the keys to suc-
cessful start-up and business development. Establishing a
corporate brand requires permanently confronting the
relevant target groups with a cohesive set of messages
about the company. This contextualisation should create
a positive image towards the firm in order to facilitate the
firm’s access to scarce resources (capital, staff, partner-
ships, etc.). If managed properly it can lead to a competi-
tive advantage, as the examples of Yahoo!’s content alli-
ances or eBay’s network of traders show. Furthermore, a
strong brand can function as an entry barrier against po-
tential competitors [49].
In the following, we apply the framework outlined
above to the case of cyberpreneurs. The five dimensions
of corporate branding have to be designed with respect to
the challenges that e-business ventures are facing today.
However, in a specific case, variables like company life
cycle stage, industry, location, or financing terms matter.
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 Proceedings of the 34th Hawaii International Conference on System Sciences - 2001
Note that we focus on branding through external
communication. Young ventures are small in their num-
ber of staff, and internal communication is not yet re-
garded as a critical topic.
4. Corporate branding of cyberpreneurs
4.1. Objectives
The challenges for cyberpreneurs outlined above, point
out that corporate branding is one of the primary objec-
tives in a company’s early years. A strong corporate
brand should facilitate recruitment, fund raising, customer
acquisition, and contracting with partners.
To position the new company in people’s minds, a
“brand network“ consisting of knowledge about the com-
pany has to be created by spreading targeted information.
Once attention has been generated, the corporate brand
should create a positive image in the relevant target
groups.
Moore postulates four fundamental stages of early
brand positioning [38]: creating a catchy name; stating the
product’s/service’s target groups and functions; specify-
ing the unique selling proposition; and explaining the
company’s financials and future prospects. Depending on
the specific audience, these messages have to be adapted
in content, communications instruments, and media.
4.2. Target Groups and Task Areas
A strong corporate brand facilitates overall business
activities. The target groups of early corporate communi-
cation are derived from the objectives of corporate
branding. Most important are the financial community,
current and/or potential customers, industry partners, and
potential employees. Therefore, financial communica-
tion, customer and partner acquisition, corporate and
product marketing communication, and recruitment com-
munication should be the main task areas of corporate
branding.
Multipliers like opinion leading special interest jour-
nals play an important role. They function as vehicles,
who cost-efficiently replicate the corporate messages.
This not only complies with the financial constraints
young firms are facing but also enhances the perceived
credibility of the message [10]. Especially in B-to-B
communication, one can speak of a “pyramid of influ-
ence.” It is recommended that brand building begins by
building a base of recognition and support within indus-
try-related innovators/e-business enthusiasts, early adopt-
ers, and industry analysts, then use the trade press, main-
stream business publications, and vertical market media.
B-to-C companies should target mass consumer titles
from the very beginning [38].
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4.3. Media
In order to reach the target groups without unintention-
ally diluting the message, the appropriate media are
needed, and this largely depends on the target groups’
media usage. Media respectively communication plat-
forms include one-on-ones, professional conferences,
recruitment and trade fairs, events (like road shows, press
conferences, founder’s platforms), professional associa-
tions, competitions, in-house publications and brochures,
traditional mass media (newspapers, journals, radio, etc.),
and Internet media (WWW, discussion groups, etc.).
These media are capable of making different sorts of
contributions to the brand building process [55]. One-on-
ones with journalists, financiers, or potential partners can
create personal networks, facilitate news production about
the company, and partnering. Professional conferences
allow the founders to demonstrate their competencies to
peers and to exchange knowledge and experience. The
same counts for professional associations, like the Inter-
net Advertising Board or the European Internet Founda-
tion. The members can participate in networking, lobby-
ing, information exchange, or common marketing. An
increasing number of founder’s platforms like First Tues-
day aim at knowledge exchange and networking for cy-
berpreneurs and everything they buy: capital, talent, tech-
nology, services, and expertise. Fairs and events enable
visibility, networking, and customer acquisition. Cover-
age in a high-circulation and opinion leading trade press
can prepare the ground for partnerships, recruiting, or
customer acquisition. Online-branding can take place at
company-controlled or outside Internet platforms. Com-
pany-controlled platforms might be directly linked to the
company’s URL (e.g., volkswagen-fanworld.com) or
placed elsewhere (e.g., abuzz.com). Platforms other than
the own Web site offer new mediators – e.g., content
providers of special interest news, portals, co-branding
company Web sites, or career networks.
However, we regard the possibilities for initial corpo-
rate branding via Internet media to be limited. The most
important issues in the early company stage require re-
peatedly face-to-face communication. Cyberpreneurs
have to convey company experience, convince others of
their competencies, give insights into products/services,
and finally bargain for capital and partnership contracts.
Take for example the case of fund raising. Valuation
standards for credit-worthiness not only involve a solid
business plan but also “soft factors” like management
skills and trust [20]. Up to this date, satisfying mecha-
nisms and instruments for engendering trust and convey-
ing social experience through online interaction exist
rarely [11]. Therefore, in order to raise capital and build
strong personal ties, the main communication platforms
are still the ones which allow face-to-face communica-
tion.
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In addition, increasing technological complexity leads
to a well-known problem in marketing. The communica-
tion of complex high-tech products/services demands
extraordinary efforts of explanation and persuasion.
Technological innovation is hard to grasp for non-
professionals as well as for a conservative public. As
several authors have shown, high-tech products/services
have to cope with severe difficulties in finding broad
acceptance ([34], [38], [56]). Suitable ICT-based plat-
forms and instruments that execute this are still lacking
(e.g., [15], [38]). Nevertheless, Internet channels might
be useful for providing information about the company
and for advertising.
Finally, the German start-up Tanto used 70,000 pizza
boxes of Munich’s delivery service Mama Pizza for its
recruiting campaign, printing them with curious slogans.
They hoped to attract the attention of programmers sitting
in the office late at night and eating pizza.
4.4. Instruments
Not only are media, but also are various instruments
capable of making different sorts of contributions to the
brand building process, as the cases in ([7], [35]) show.
Their effectiveness depends on the specific objectives and
target groups. Out of the many possible instruments use-
ful to attract attention and build a corporate brand we will
outline just a few.
Experiencing the company through face-to-face inter-
action is an important determinant for brand building.
One can meet the founder(s) and become familiar with
products/services. Visibility not only is a prerequisite for
generating nearness, credibility, and trust in the company.
Face-to-face communication also plays a key role in de-
veloping and retaining personal networks. Possible media
for networking with other cyberpreneurs, potential cus-
tomers, financiers, advisors, or journalists are founder’s
platforms, fairs, conferences, or associations. This can
facilitate media coverage, the acquisition of early projects,
better access to venture capital, etc. Additionally, it can
provide insights into industry-specific knowledge and
customer requirements. Networks also provide the
ground for cost-efficient word-of-mouth [38]. Word-of-
mouth not only facilitates customer acquisition but also
recruitment. As a recent study by IDG shows, for 74% of
the surveyed Internet start-ups, word-of-mouth is the
most-used source to find job candidates [53].
Furthermore, we propose that young and unknown
companies invest in advertising early, even before mar-
ketable products/services exist. As discussed above, at
the beginning, innovators and early adopters should be
addressed, followed by increasing market penetration
during growth. When it comes to IPO, financial adver-
tising has to attract the attention of future shareholders.
Forrester Research estimates that Internet companies were
spending $2.7 billion on ads in 1999, two-thirds of that in
0-7695-0981-9/01 $10.00 (c) 2001 IEEE
offline media. By 2004, it will be $2.2 billion online and
$6.3 billion offline [19]. Speaking of advertising, a
promising way to enhance perceived competence and
credibility is to co-brand. This means that two companies
share a promotional platform, e.g., a cyberpreneur and an
already established and strongly branded partner. An-
other common form of advertising, used especially by
software companies, is the release of beta versions.
Yet, at least two severe disadvantages of advertising
exist. Highly penetrative campaigns are very expensive.
Furthermore, compared with news, ads seem to be inferior
in credibility. For the latter, two contradictory explana-
tions exist. On the one hand, it is argued that the audience
perceives news as a recommendation delivered by an
“objective” third party – the journalists. In contrast to
this, advertisements seem to be produced with an objec-
tive to manipulate [21]. On the other hand, researchers
find that most people process information in a biased way.
An audience favors news and even public relations cam-
paigns because the audience attributes expertness, inde-
pendence, and an unclear intention to persuade to them.
In contrast to this, a tendency of advertisement avoidance,
resistance, and discounting leads to biased cognitive proc-
essing of advertisements [17].
Therefore, news production through public relations is
vital. Press releases, one-on-ones with journalists, public
talks, taking public stands, public relations campaigns, or
lobbying activities close this credibility gap and provide
young companies with a cost-efficient method to spread
their messages ([25], [36]). It also provides a tool to
increase awareness for innovative business ideas and
explain complex technological products/services. Re-
garding content, potential industry partners might be in-
terested in test reports, news and special features on early
success stories, future perspectives, product/service func-
tionality, and the management staff. Potential buyers
might additionally be persuaded by features on early cus-
tomers’ product/service experiences. Pre-IPO distribution
of formal information about the offering is essential – not
only for legal reasons. A common trend in cyberpreneu-
rial news production is to permanently communicate the
momentum behind a company name [7]. Some cyberpre-
neurs preannounce and announce almost anything new
about the company: the first partnership, the company’s
birthday, the umpteenths employee or customer, etc.
A common trend seems to be the personification of
corporate brands. It appears that media coverage in-
creasingly focuses on the e-business founders themselves,
as the popular examples of Steve Case/AOL and Jeff
Bezos/Amazon for the U.S., Paulus Neef/Pixelpark,
Stephan Schambach/Intershop, or Thomas Haffa/EM.TV
for Germany show. One reason might be the relative easy
access for journalists to managers of young companies,
since those firms are highly flexible in organization.
Faces and names might be effective stimuli for the activa-
tion of audience’s cognitive schemata. Charismatic lead-
7
 Proceedings of the 34th Hawaii International Conference on System Sciences - 2001
ers also have an important impact on employees’ brand
awareness and the brand image as seen from an external
viewpoint [35].
A coherent visual presentation of the company by its
corporate design (logotype, trademark, taglines, etc.) is
another key to cognitive schema building. It facilitates
recognition of the company name and produces condi-
tioned information and emotions [6]. Another possibility
of attracting attention and influencing attitude formation
is to take part in professional competitions. For example,
a best business plan competition provides a company with
assistance to write a business plan, chances to disseminate
its name, and to get in touch with potential financiers.
Later, awards and certificates for products, services, or
technologies engender perceived competence and credi-
bility.
Communicating via Internet infrastructure should in-
clude at least a corporate Web site to attract and tie the
target groups together ([22], [26]). Banner ads, pop-ups,
chatting and news dissemination should point to the new
company and refer to its Web site. In order to keep the
target groups online the corporate Web site has to be
designed and targeted in content and presentation. This
can be done with the help of several technical modules,
e.g., for management, data analysis, filtering, profiling,
and auto-adaptive representation, all designed to generate
and present information case sensitively in accordance
with a user’s actions and characteristics [41]. An example
for guerilla marketing over the Net is RCA Records’. In
order to promote Christina Aguilera, at that time a new
singer on contract, RCA hired a team of youngsters to
swarm the Web and chat positively about her on popular
teen sites and fan sites for teen acts, both incognito and as
official representatives [57].
Other instruments for guerilla marketing include fly-
ers, broad visibility and news campaigns, etc. Although it
usually is seen as a cost-efficient method for attracting
attention, its usefulness is limited to companies address-
ing a broad clientele, especially in B-to-C markets.
4.5. Professionalism
Targeted corporate communication requires careful
market research. An in-depth knowledge of financial
markets and industry structures, especially existing and
potential products/services, customer segments, and value
chains is fundamental for establishing a corporate brand.
Additionally, professional branding calls for an or-
ganizational design, which facilitates efficient and effec-
tive communications. Given qualified personnel, it needs
structures and processes conferring power within the
company. A powerful communications function requires
influence on corporate strategy building and implementa-
tion, large enough budgets, (vice) presidents with a com-
munications background, highly qualified personnel, and
coordination power over all fields of corporate communi-
0-7695-0981-9/01 $10.00 (c) 2001 IEEE
cation, including public relations, marketing communica-
tion and investor relations [55]. An empowerment of the
corporate communication function in terms of resource
allocation and decision making allows a company to build
a strong corporate brand by coordinating communication
in terms of time, form and content, and thereby fostering
the credibility and trustworthiness of the firm.
Whereas in consolidated companies product-marketing
communication traditionally dominates the other commu-
nication functions [23], young ventures have great op-
portunities to integrate corporate communication in order
to establish a strong corporate brand. During their first
years, they usually offer only a narrow range of prod-
ucts/services and still operate on local markets. Their
messages have to meet relative simple requirements com-
pared to diversified and global companies. Additionally,
ventures are small in their number of employees, which
facilitates the coordination of external communication in
terms of message contents and timing. Whereas in estab-
lished companies change management is a lengthy and
painful process, young firms’ cultures are still unconven-
tional and flexible. The creation of awareness for corpo-
rate branding should be more easy. However, start-ups
often lack of experienced managers who know about the
impact of a coherent corporate brand.
5. Concluding remarks and further research
In this paper we introduce a framework for corporate
branding through communications management. Ac-
cording to key challenges for entrepreneurs in electronic
markets today, the framework was applied to cyberpre-
neurs. We propose that financial communication, cus-
tomer and partner acquisition, corporate and product mar-
keting communication, and recruitment communication
are the main task areas of corporate branding. They
should facilitate recruitment, fund raising, customer ac-
quisition, and contracting with partners.
Branding an e-business venture, then, aims at generat-
ing knowledge on behalf of the relevant target groups in
order to build a positive image. Therefore, the company
has to provide contextual cues that guide decision making
and inferences. These cues emerge from repeatedly con-
fronting the target groups with a cohesive set of messages
about the company. Brand building requires an integrated
use of traditional as well as unconventional platforms and
instruments to communicate coherently towards all rele-
vant target groups.
Note that at least three constraints for corporate
branding exist: psychological, legal, and technical ones.
First, communication effectiveness heavily depends on
psychological characteristics of human behavior, rooted in
personality traits, attitudes, involvement, cognition, social
needs, and the like [37]. Second, regulations might re-
strict the possible amount and instruments of communica-
tion. An example would be the Securities Act of the U.S.
8
 Proceedings of the 34th Hawaii International Conference on System Sciences - 2001
Securities and Exchange Commission, regulating public-
ity around IPO. Third, online consumer research is still in
its infancy. As a recent survey shows, there are no insti-
tutions engaging in cross-border and comparative con-
sumer research for European online markets [47].
Future research should include an application of this
framework to various industries and dimensions of life
cycle stage, like growth, size, and age. Besides, an analy-
sis of differences in corporate communication between
corporate and independent ventures seems reasonable.
Building corporate brands online would be a separate
research project as well as possible consequences of on-
going media convergence. Finally, empirical data on
integrated cyberpreneurial branding are still lacking.
Acknowledgements
We gratefully acknowledge financial support granted
by the Swiss National Science Foundation for funding
within the Swiss Priority Programs. Ulrike Geissler is
indebted to Patrick Staehler for stimulating discussions
and important insights. Thanks to Sabine Einwiller, Bri-
gette Buchet and the anonymous reviewers of an earlier
version for helpful comments.
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