The Power of The Underdog Effect in Brand Storytelling
Imagine having to sell your dog for $15 to desperately make ends meet.
Before winning three out of nine Oscar nominations and writing the Rocky script in days, Sylvester Stallone did just that. When offered $360,000 for the script with the condition he wouldn’t star as Rocky, Stallone stood firm even with only $106 in the bank.
Stallone’s persistence and determination paid off. We can’t help love a good underdog story—whether in movies, business, or life.
The power of the underdog story has strong roots in the consumer world. Before J.K. Rowling became the first author to earn a net worth of $1 billion, her Harry Potter pitch was rejected 12 times. Born into poverty, Oprah Winfrey became the first African-American billionaire in 2003. Without ever declaring bankruptcy unlike its US competitors, barely two-decades-old Tesla surpasses century-old General Motors as the most valuable US automaker.
Brands have become masters in storytelling and using the mighty “us against the world” tale in the way they market and build a following. Whether it’s incorporated into the product, brand, or the founder themselves, the underdog effect has become an effective tool in shaping consumer perception.
To understand the psychology behind why we admire underdogs and how brands successfully use the narrative to influence consumer psychology, let’s dive into the science and business of The Underdog.
Brand Storytelling and The Underdog Effect
Brands in the business of telling their origin story know the basics of human nature. If there’s one thing we’ve learned and naturally passed down to future generations from our ancestors, it’s our love for gossiping and telling stories. But why are we so drawn to brands that use underdog stories specifically?
When we are led to believe that a company succeeded against external disadvantages (like an economic recession, for instance), we identify with the situation. The more we identify and internalize the gravity of the story, the more we root for it. There’s evidence indicating that brands with an underdog story can influence our consumer psychology, by increasing purchase intent and even driving brand loyalty. And what’s even more interesting: this effect is more pronounced to consumers who identify themselves to be underdogs. This is brand storytelling at its finest.
It’s no surprise then that companies like Nantucket Nectars famously describe their humble origins as “starting out with a blender and a dream.” American beer Samuel Adams, despite being a large, established name, constantly compares itself to the behemoths of Budweiser and Coors, neglecting the fact they are all massive in comparison to craft breweries. Brands love the tales of humble beginnings because we’re drawn to them. Why so? When you add movies, literature, and the American Dream in the mix, the plot thickens.
The underdog story is one of the most classic storylines with a universal appeal, reliably driving feelings of empathy. They tap into the qualities we like best about ourselves and find most admirable in others. We love underdog stories because we feel like they need us. It creates that gravitational bond between us and the underdog because we love to feel needed as social creatures.
Studies have shown that the literal act of witnessing an underdog story gives us hope. If we walk out of the cinema after watching classic underdog tales like Rocky, Karate Kid, or The Pursuit of Happyness, the impact of experiencing the protagonists’ ascendance fills us with a newfound sense of hope. And this isn’t a fleeting feeling. We carry this feeling with us several days after it’s over.
The underdog story is also deeply rooted in the American Dream. Economically or socially “moving up” in the world is paramount in the context of American culture. It’s not just where you wind up, but how far you’ve climbed to get there.
And the beauty about the underdog story is that its overall success will always be judged relative to the starting point. In short, there are no rags to riches story if it doesn’t start in the rags. Similarly, when there’s an underdog, there must always be a top dog. Let’s look at how this plays out in business, particularly in technology.
The Underdog Brand in the Technology Industry
When there’s a David, a Goliath naturally follows. For Tesla, Goliath was the big bad auto industry. For Apple, it was the clunky, unfriendly interface and design. For Airbnb, it was the expensive, old-fashioned hotel industry.
Startups in the tech industry have a historical fondness for the underdog lore. A field dominated by ‘nerds’, ‘geeks’ and ‘misfits’ traditionally counted out, picked on, and doubted have risen to the occasion.
Despite being arguably the most dominant industry in the global economy, technology brands still go to great lengths to preserve and emphasize their underdog status. When you think of technology, underdog brand is probably one of the last things to come to mind.
Amazon, the other trillion-dollar company with a market cap larger than the GDP of most countries, is also fond of its humble beginnings. In fact, its CTO Werner Vogels still considers themselves a start-up even with 750,000 employees worldwide. Amazon founder and world’s richest man Jeff Bezos famously created a makeshift desk from hammering four legs into a wooden door back when he was just starting in 1994 and still keeps the famous “door desk” in his office today. If there’s one thing Bezos has in common (aside from billions of dollars in net worth) with many tech founders, it’s the garage.
The startup garage is the symbol of the underdog nature of the tech industry synonymous with the underdog tenacity. In 2016, Business Insider still lists HP, Google, and Steve Jobs’ garages as some of the “19 Silicon Valley landmarks you must visit on your next trip” alongside museums and tech headquarters. Today, HP still emphasizes its humble beginnings, deeming its garage the “birthplace of Silicon Valley.” It’s not just the startup garage that has yet to lose its charm. Even when a business outlives its founder, the underdog story remains woven into the company's culture.
At the Milwaukee-based insurance giant Northwestern Mutual Life Insurance, for instance, employees still learn about a train accident that occurred near Johnson Creek, Wisconsin in 1859, shortly after the company was founded. Fourteen people were killed, including two Northwestern Mutual policyholders, whose claims totaled $3,500. The young company had only $2,000 on hand, but its leaders took out loans to pay the claims in full immediately. Whether they tell it or not, every founder is a story.
Underdog Founder Stories
Many brands add a hint of narrative to their founders’ story, but brands who bring their a-game tell an underdog story. Underdog founder stories are so compelling that several companies have leveraged them.
Dwayne “The Rock” Johnson. Before the age of 17, Johnson was arrested multiple times for fighting, theft, and check fraud. Now, he’s one of the highest-grossing actors of his generation with a net worth of $320 million. Calling back to his roots, he named his production company Seven Bucks Productions because he only had $7 to his name at his lowest point. That’s a successful underdog founder story in constant action, inspiring and winning the hearts of many.
Sir Richard Branson. Perhaps the best example of The Underdog CEO is Branson. He bounced around between schools for low grades. Diagnosed with dyslexia, he couldn’t read at the age of 11. On his final day of school, his headmaster reportedly told him that he would “either end up in prison or become a millionaire.” For many years, it looked certain that it would be the former, but the rest is history. Through it all, his launching of Virgin Records was a success. Branson, valued at over $4 billion, is one of the most recognizable business celebrities in the world. And is Virgin still selling records? Yes, but they have sold us more—from airfare, mobile internet, and so much more. The common thread between diversified Virgin businesses is Branson. Regardless of what ultimately bears the Virgin logo, what it really sells is Branson’s underdog, rebellious story.
After standing firm on playing Rocky Balboa, the producers finally came around and gave Stallone a shot with a miserly $1 million budget. Stallone, defying the odds, pulled it off under budget with the help of friends and family in the cast.
After selling the script of one of the greatest rags to riches American Dream story ever told, Stallone bought his dog back for $15,000. How’s that for a classic under~dog~ story?
Photo by Aaron Sebastian via UnSplash
About the author
Matt Johnson, PhD is a researcher, writer, and consumer neuroscientist focusing on the application of psychology to branding. He is the author of the best-selling consumer psychology book Blindsight, and Branding That Means Business (Economist Books, Fall 2022). Contact Matt for speaking engagements, opportunities to collaborate, or just to say hello
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