Branding Can Break, or Make Your Company - even in B2B SAAS

If a venture capitalist was a walking stereotype - they would have plenty of vests (ideally Patagonia), ride a Peloton, and drive a Tesla (probably an X). While every VC is different, tech forward brands with the right overall brand orientation generally have strong appeal in VC circles. 

I don’t necessarily have the normal VC background, but I’ve regularly ridden a Peloton (since 2018), and had a Model 3 since 2021. I’m not against a nice vest, but never wear them…they’re just not that comfortable for me. But, I do have a lot of Cotopaxi jackets, and prefer tech forward brands. 

Peloton has experienced plenty of turbulence over the last few years - a stark contrast to its nearly $50B market cap in early 2021. In early 2021, demand far exceeded demand, and people happily paid well over sticker price. Now, Pelotons are more likely to be coat racks than regular workout machines. I actually bought a refurbished Peloton in December 2024 for $1,050 - including a 4-year protection plan, delivery, and tax. It looks, and feels brand new too. 

Tesla still trades around an $900B market cap now - but traded at $1.4T when I bought my Peloton in December. Although it’s been recently hit by a variety of factors, it’s actually trading higher than when I bought my Model 3. I’ve been a longtime bear on Tesla stock - ever since I sold it in 2019. But, I’m clearly not a good stock trader…and potentially not a good car buyer too. 

I opted for the AWD long range Model 3, and was excited to take delivery - especially after upgrading from a base Honda Civic. In fact, I’ve had 3 cars since college - including 2 silver Civic coupes and an Acura ILX (basically a Honda Civic). I was shocked at the quality of the last Civic…it seemed light years behind the even more basic cars I rented on trips.  

Although it took me a few weeks to figure out how to do everything with the Model 3 (it’s not that intuitive), I absolutely loved the way it drove and the ease of driving. The sight lines were perfect, the ability to pass cars on the highway was amazing (0-60 time is something like 4.2 seconds), and the one pedal driving was a game changer. Best of all, I felt incredibly safe driving it - and know that it’s helped me dodge a few close calls from some laughably bad drivers. 

If I ignore all the DOGE stuff, and some of the random tech issues, I’m generally very happy with the car. There are/were some real quality issues, and I don’t really trust Autopilot - but it checks off the most important boxes. However, given all of the recent violence against Teslas, and everything else, I decided to check on my car’s possible sale value. Even with all the negative headlines, my car has very light mileage, has been garaged every day, and rarely been supercharged. I was expecting to take a hit - but the Carvana offer was stunning. 

Carvana (usually one of the better places to sell a car) offered 54% less than I paid 3.5 years ago (after less than 18k miles). And, there is not exactly a shortage of aggressively priced 3’s and Y’s in the DC area on other sites (including dealer profit too). I sold my 3-year old base Honda Civic for almost $20k (what I originally paid)...and my Tesla is apparently only worth $24k now. 

I could take this article in a bunch of directions - but the most relevant would be market timing, downside protection, or brand value. In this case, the obvious choice is the value of a brand. 

Most SAAS companies spend time and effort on their branding and online presence - it’s part of their social proof, and sales process. However, most B2B SAAS startups also tend to have a pretty limited brand name, and limited brand equity outside of their core user base. So, in many cases, their brand presence does not necessarily drive much of an impact. 

However, if the brand becomes well known - its reputation becomes a big asset, or liability. If the brand is known for doing good things, and driving good outcomes, it can lead to tangibly better close rates and retention. On the other hand, if they have a public issue (enough where they have a decent amount of news coverage), things can fall like a rock. 

I’m not going to name the startup here, but it’s a company I know pretty well - I’ve looked at a few past rounds, and ultimately never gotten to a “yes.” The founder does actually check most of the boxes for me, and has a pugnacious underdog mentality - with plenty of fight. But, I never liked the space, the valuation, or the likely exit. 

To the founder’s credit, they have actually scaled up a bit, and generated far more traction than I thought possible. However, they’ve also raised much more money too - and with some very negative headlines, have very real issues. Given the new headwinds, I don’t think they’ll survive deep into 2025, and will probably go bankrupt (they cannot raise more money, and the acquirers will be super cautious). 

As for my Model 3, selling would be painful (but is something I’m weighing now). While I was planning on buying a new Model Y (pre-DOGE), I would really hesitate to buy another Tesla. I still love the actual car itself (though cargo space is lacking for all the stuff that comes with a 1 year old) – I’m just not sure about the brand anymore. And, I’m clearly not alone.