I had a great chat with Tony Wright yesterday evening over a few drinks. Tony has a degree in psychology and is a fellow entrepreneur and we got chatting about the Milgram Experiment and its applicability to branding. Here’s a video summary:

The experiment found that few people have the resources needed to resist authority, even when the authority figure is telling them to do something in violent opposition to their moral judgment.

Brands carry a level of authority. Take a startup for example:

• It’s founded by two Stanford postgrad students. +2 authority
• It’s published on Techcrunch as the hot new thing. +1 authority.
• It gets Angel funded by Larry Page, one of the Google founders. +7 authority
• It gets a first round of VC funding from Sequoia. +5 authority
• It gets published in the NY Times also as the hot new thing. +5 authority

You don’t yet know what this brand does, but you’re already dying to become a user – simply because the brand has a ton of authority and because your Milgram susceptible brain is telling you you to obey. [Or perhaps you fall within the 35% of Milgram participants who didn’t kill the learner]

This is the reason I signed up for Joost very early on – because it’s founded by Niklas Zennstrom, one of the Skype founders.

I’ve seen startups do an excellent job of creating this authority using big marketing budgets and great PR firms without any product to speak of. Users wind up (to use a British expression) gagging for it and they don’t even know what the value proposition is.

On the flip side, many great products lack the brand authority to get the user adoption they need. For companies on a tight budget run by first-time entrepreneurs, this is a challenging hurdle. I don’t think it’s insurmountable though – it simply takes more time and careful growth.

Simply realizing that your brand has authority that needs to be grown is a great start.