Slaying Goliath - ebook

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  • SLAYING GOLIATH:How Small Companies Can Compete Against Their Large Competitors

  • Foreword ....................................................................................................................... 1

    Chapter 1: Capitalizing on Your Advantages ...................................................................... 2

    Strategy 1: Creating an Information Advantage ................................................................. 3

    11 Ways to Maximize the Information You Generate from the Outside World .................. 4

    Strategy 2: Creating a Time Advantage ............................................................................ 7

    Strategy 3: Creating a Scope Advantage ......................................................................... 10

    Strategy 4: Creating a Scale Advantage .......................................................................... 12

    Strategy 5: Creating an Innovation Advantage ................................................................. 14

    Why Innovation is Challenging for Large Companies................................................... 15

    Strategy 6: Setting Your Operating Point Closer to the Funnel Singularity .......................... 17

    Chapter 2: Attenuating Larger Companies Strengths ....................................................... 20

    Strength 1: Great Senior Managers and Top Technical Talent ........................................... 21

    5 Tips for Leveraging a Smaller Team of Technical Talent ........................................... 22

    Strength 2: A Technology Platform in Place with Customers ............................................. 23

    Strength 3: A Deep Patent Portfolio and Ongoing New Patents ......................................... 25

    Strength 4: User Comfort with a Products User Interface Look and Feel ........................... 26

    Strength 5: Well-Established and Plentiful Customer Relationships .................................. 27

    3 Types of Large Company Customer Relationships .................................................... 28

    Strength 6: Well-Developed Distribution Channels........................................................... 29

    Strength 7: A Brand Name and Reputation .................................................................... 31

    A Template for Creating and Understanding Brand Associations .................................. 33

    Chapter 3: Defending Against Larger Companies Attacks ................................................ 34

    The Nature of Large Company Attacks ........................................................................... 35

    5 Factors that Influence How Aggressively Large Companies Attack ............................ 36

    How to Defend Against Large Company Attacks .............................................................. 37

  • Chapter 4: Executing Against Execution ......................................................................... 41

    Genetically Engineer Your Organization .......................................................................... 43

    Create Challenging Focal Points .................................................................................... 44

    Sample Goals for Every Department ......................................................................... 45

    Measure Progress and Make Frequent Adjustments to Close Gaps ................................... 46

    Be Flexible .................................................................................................................. 46

    Wake Up to Your Current Situation ................................................................................ 47

    End Note .................................................................................................................... 49

    Appendix .................................................................................................................... 50

  • Slaying Goliath: How Small Companies Can Compete Against Their Large Competitors | 1

    Weve all heard the story of David and Goliath. Its a classic

    metaphor for small versus big, smarts and strategy versus

    power and resources. Its an allegory that promotes hope for

    the little guy. When bigger competitors appear too large to

    attack, Davids triumph is a reminder that theres vulnerabil-

    ity somewhere you just have to identify and attack it.

    Of course, thats often much easier said than done. David

    never had to go up against the likes of IBM, Computer

    Associates, BMC, or Microsoft. Some expansion-stage tech-

    nology companies wage that war every day and its not one

    that most of them win. That doesnt mean that there arent

    opportunities in markets where Goliaths exist, however.

    Lets say that youre the CEO of an expansion-stage com-

    pany in a $2 billion market and your behemoth competitor

    already owns 60 percent of it. Yes, theyre dominating, and

    trying to defeat them is an uphill battle you cant and

    probably shouldnt fight. However, theres still 40 percent

    of that $2 billion market that your behemoth competitor

    does not control. If you can manage to take 5 percent of the

    total remaining market and steal as little as 1 percent away

    from that big competitor, youre looking at potential revenue

    that exceeds $50 million.

    The challenge is actually identifying your biggest competi-

    tors vulnerabilities and formulating a plan of attack. What

    can you do better than those competitors? What market pain

    point are they ignoring? What advantages does your smaller,

    nimbler business have relative to customer engagement, tal-

    ent management, or new market opportunities?

    If you are going to succeed in a David versus Goliath type of

    battle, you must be able to show your customers and pros-

    pects the value of a business thats focused on one product

    and one pain point. Youre not going to try to sell them a

    suite of solutions that they dont need just the thing that

    fixes their problem.

    Slaying Goliath: How Small Companies Can Compete

    Against Their Large Competitors is intended for CEOs and

    senior executives of expansion-stage companies and shows

    you how to build a long-term defensible competitive advan-

    tage over larger companies. Specifically, youll learn how to

    capitalize on the natural advantage your smaller company

    has over its larger competitors, minimize those larger corpo-

    rations inherent strengths, and execute against your vision

    in a way that allows you to keep your foot on the gas and the

    pressure on bigger competitors to respond.

    The bottom line is that winning in a market thats dominated

    by a big business isnt easy. But its not impossible. Remem-

    ber, all you need to excel is a very small piece of their pie.

    So, whats your Goliaths biggest weakness (or your crowded

    markets biggest need) and how well is your company posi-

    tioned to go after it?

    Scott Maxwell Senior Managing Director and Founder OpenView Venture Partners

    Foreword

    http://blog.openviewpartners.com/keyword/expansion-stage/http://www.openviewpartners.com

  • Slaying Goliath: How Small Companies Can Compete Against Their Large Competitors | 2

    Chapter 1:

    Capitalizing on Your AdvantagesIn theory, David shouldnt have had a chance against Goliath. After all, Goliath was a grizzled

    warrior with a coat of armor and a massive sword. David, on the other hand, was at least half

    Goliaths size and showed up to the battle with little more than a sling and five stones.

    But that didnt seem to hinder his confidence. Thats probably because David recognized that his

    opponents advantages (brute strength and size) could also be turned into disadvantages that he

    could capitalize on. The same principle holds true for expansion-stage technology companies. This

    chapter outlines six strategies that can help small, expansion-stage technology businesses recog-

    nize and take advantage of their competitive advantages and use them to expose their much

    larger competitors. In the end, thats the fastest and easiest path to winning the battle against

    any proverbial Goliath.

  • Slaying Goliath: How Small Companies Can Compete Against Their Large Competitors | 3

    Strategy 1: Creating an Information Advantage

    Expansion-stage companies have the natural advantage

    of being closer to their customers than large companies

    are. Make the most of this by increasing the flow of

    information into your company.

    What melts more slowly, a small snowball or a large one? All things being equal,

    the large snowball will melt more slowly because its outer layer of snow insulates

    the snow inside. By contrast, more of the snow in the small snowball is exposed to

    the outside world, and it therefore reacts to the environment faster.

    Big companies have the same basic geometry as a large snowball. Most of them have a

    much harder time getting a true feel for their outside world (i.e., their customers, market,

    and competition) than small companies do. This has nothing to do with the quality of the people who work there or the com-

    pany itself, its just a natural disadvantage that large companies have relative to small ones.

    So how can you exploit this opportunity? First, create an advantage by maximizing the information you generate from the outside

    world (i.e., your customers, non-customers, competitors, suppliers, and others outside of