Today’s economy is the opportunity of a lifetime for risk-taking tech companies. The intense economic pressure on all firms is forcing IT organizations to rethink infrastructure and vendor choices.
If you’ve got an innovative product that cuts costs you’re only half way there. Because if you play the game the way the big boys do, you’ll lose.
That’s the topic of the latest Malcolm Gladwell article How David beats Goliath.
David vs Goliath
In a great story – almost as good as the later David, Bathsheba and Uriah, but without the “R” rating – the shepherd boy David steps up to meet the enemy champion Goliath. He wins by using his own weapons and an aggressive strategy.
This – and a great story about a girl’s basketball team who’s full court press let them beat much stronger teams – makes the article’s point:
The political scientist Ivan Arreguín-Toft recently looked at every war fought in the past two hundred years between strong and weak combatants. The Goliaths, he found, won in 71.5 per cent of the cases. That is a remarkable fact. Arreguín-Toft was analyzing conflicts in which one side was at least ten times as powerful—in terms of armed might and population—as its opponent, and even in those lopsided contests the underdog won almost a third of the time.
. . . What happened, Arreguín-Toft wondered, when the underdogs likewise acknowledged their weakness and chose an unconventional strategy? . . . In those cases, David’s winning percentage went from 28.5 to 63.6. When underdogs choose not to play by Goliath’s rules, they win, Arreguín-Toft concluded, “even when everything we think we know about power says they shouldn’t.”
The full court press
What are a small company’s chief advantages?
- Focus. You do one thing well and you always remind everyone in the industry of that. Your top people are thinking about this every day – their top people aren’t.
- Agility. You can change your messaging rapidly because you don’t have hundreds of field people to train or dozens of brochures to reprint. Your product is what it is – how you present it can quickly change based on customer feedback or new trends.
- Boldness. You can pick a fight with the biggest vendor and there is almost no way you’ll lose. They have other products and initiatives competing for senior management’s time – you don’t. If they ignore you people wonder why. If they don’t, people also wonder why.
- Scale. You can scale smaller than a big company – going after niches that can’t support their overhead. Just don’t fall in love with it if you want to grow large.
- Strategy. With some insight and competitive knowledge you can get inside your competitor’s head and tweak them hard: highlight their product weak points; critique their market strategy; highlight their bad news; question their silence; and work with other firms that don’t like your competitor.
Oops: the flip side.
But 2/3rds of small storage companies don’t win. Why?
- Uncertainty. Storage is a horizontal technology. However, a small company can’t go after several verticals at once. Go narrow and deep. Pick a vertical where your added value is the most compelling – based on what customers tell you – and build a defensible and profitable base.
- Slow. When you aren’t focused there are a dozen things competing for your attention – and a dozen reasons why your costly sales force isn’t closing a higher percentage of deals. And you aren’t clear on your target customers and what they want, nor how to find them. Result: unprofitable wheel spinning, scattershot marketing and a burn rate that eats you alive.
- Fear. With a win here and a win there, but a high percentage of lost deals, you can’t focus and worse, begin to fear that you have to go after several verticals. Then you’re doomed.
- Losing the way the big boys win. You may think, for example, that Gartner will pimp you after you buy studies and analyst input – but they won’t say anything nice about you until their enterprise customers say it first. The magic quadrant is a feel-good moment but what is much more important is what customers say about you.
- Tactics. Strategy development and discipline is hard work – easier to focus on the next feature or the web site revamp because they feel like progress. Even when you’ve got the right strategy there’s a 6 month lag before you start seeing results – and the doubters and the naysayers will be whispering poison in your ears.
The StorageMojo take
It’s always easier to lose doing things the expected way. Who can fault you? And even when you go the David route and vastly improve your chances you can still lose.
That’s the risk with bringing in the wrong big-company guys. Too many are devoted to the big company forms and rituals and aren’t able to think like a guerilla.
It sounds like fun, but for most marketing people and almost all engineers it’s hard because it’s new. But if you play the big boy’s game you’re likely to get crushed.
Which isn’t fun at all.
Courteous comments welcome, of course. Even Steve Ballmer realizes – finally! – “We need to be more disruptive in search.” Microsoft: biggest underdog in the industry.