Every day, we wake up and hit the floor ready to do battle against some competitor who spends more on postage than we do on marketing. They’re huge. They’ve got a massive budget, a big payroll, agencies tripping over each other and resources we can’t hope to match.
And we’re supposed to beat them, today and every day.
This is good news.
In Killing Giants: 10 Strategies to Topple the Goliath in Your Industry, I spoke to over 70 “giant killers” from 13 countries around the world, representing industries from consumer products to technology to B2B, and I learned that not only can you out-maneuver the giants you face, but you can often take advantage of their greatest strength in the process.
Here are three ways you can kill the giants.
1. Focus on Winning in the Last 3 Feet.
Is the giant spending millions on advertising? Are they launching a massive campaign or a huge product launch? Don’t look at this as a matter of their budget vs. yours – you’ll always lose that fight. Look at this from the perspective of them pulling millions of eyeballs and tons of foot traffic to the stores or to the Web. Now, you’ve got something to work with. Enter the conversation in the last three feet – between your prospective customer and the sale, when the giant thinks the game is over – and win there.
Here’s an example of what I mean. Oslo University is the second largest business school in its town. The Norwegian School of Management outspent it 200 to 1. With a budget of only 50,000 krone – roughly $8,500 – Oslo University turned to search search engine marketer iProspect for help. After a brief competitive analysis, they discovered that their giant’s US$2 million budget was everywhere but online. By targeting keywords that leveraged their competitor’s curriculum course names in the tightly defined time frame just before admissions closed for the term, Oslo University saw its admissions jump five-fold – and even beat its larger rival’s admissions numbers.
2. Realize That Speed Kills.
It’s often said that in big companies, you get promoted for saying “no” to risky things. Having worked for plenty of big corporations, I know this to be true! Giants have their own cultures and rewards systems. Before they make a move, they first form interdisciplinary task forces, set up meetings, fly people around the country, bring agencies on board … and while they’re doing all this, you ship. They issue meeting minutes. You ship. They form a consensus; you ship. You’re three steps ahead, and they’re aiming at the product you replaced two cycles ago.
Mike Cassidy, founder of many successful Silicon Valley startups including instant messaging platform Xfire, described this “speed culture” mentality when he told me that his team was producing a new version of his platform every two weeks. His massive competitors – AOL, Yahoo and MSN – were conducting competitive product assessments on one version of their products, when he had already shipped dozens of revisions of his. By the time MTV purchased Xfire in 2004 for $110 million, Xfire had amassed over 16 million customers who used its software an average of 88 hours a month.
3. Eat the Bug: Do the Unthinkable.
Companies develop rules, guidelines and overall boundaries as they grow. They fight and win in the market, and their success makes them confident that they’re doing it all right. But their success often sows the seeds of their undoing. They continue to fight the last war until the realities of the new one catch up with them. Smart “giant killers”develop business models that the giants simply can’t imagine themselves following.
Cricket Holdings is in the business of direct response advertising, the red-headed stepchild of the marketing world. But what the business lacks in sexiness, it makes up for in performance. Cricket does what no advertising agency would dream of doing: It offers “customers” on a pay-per-lead basis. Once its predictive model looks at its customer’s category and day-part, it quickly optimizes the media flights to understand its variable cost per “customer” and then offers it at a fixed price markup to its clients. Now, the risk of performance has shifted from the director of marketing’s shoulders to Cricket’s – and CEO Victor Grillo is happy to bear the burden. When an advertiser wants to know what each dollar invested will bring in, Cricket is happy to step in where most traditional agencies would beat a hasty retreat.
Business isn’t just about how much money we’ve got to spend but rather how big our ideas are. Perhaps it’s easier to just throw money at problems, but small businesses can’t afford to do that. Besides, today’s times call for different tools and a different mindset. I hope these three tips give you a few thinking tools you can put to use today to give you the mental ammunition to topple the Goliath in your industry.
Sounds fascinating. Did you talk to any companies that were once the nimble startup, but have become the giant in their industry? I would be interested in how/when the switch occurred.
Brilliant article. Essential reading for any SMB…
I started a podcast recently aimed at SMB’s and Entrepreneurs and will be finding ways of brining this up and pointing viewers back to this post.
Very interesting read. I agree that having a first mover advantage will always get you far and you can so easily do that being a smaller company as long as you are one step ahead of competition. Thanks for highlight the fact that no matter what the size, a company can still be part of competition if they keep these points in mind. Thanks for sharing!
Training for Entrepreneurs.com
@ Robert: Yes! Ones you’ll find most appropriate are my talk with GoDaddy’s Bob Parsons, Boston Beer Co’s Jim Koch, and Method’s Eric Ryan. Interesting to see how Bacardi manages the upstart 42Below brand, too! Hope you enjoy the book.
@ Scott: many thanks for your kind words and happy to discuss with you.
@ Riya: first mover advantage is often a deciding factor for tech products that are more “winner take all” than typical consumer products. As Mike Cassidy said in my interview re Xfire and Direct Hit, “The first to market gets 16 million users and the next one gets zero.” Appreciate your kind words!
I love this piece. I would also add that SMB owners shouldn’t be afraid to take risks to WOW their customers and stand out from the larger competition. I always go back to Seth Godin’s book, purple cow. Find a way to be extraordinary.
@ Ryan: Thanks, appreciate your kind words! You’ve said 2 important things here – risk and wow. Risk tolerance is an advantage every Giant Killer has over its larger competition – see the Vibram FiveFingers story more more in the book. Wow, in so many words, is what I refer to as “Polarize on Purpose” – make a meaningful difference and force a comparison. Great examples from Prizeotel in Germany, MINI USA, and others here. Thanks!
Great article. I’m a serial entrepreneur from Bob Parson’s former home, even bought his old office furniture at $1 a chair and $5 a desk for my last company!
I’ve done some pretty big deals as a start-up company connecting up with Billion Dollar players by building system that does exactly what their vendors have been promising before I make the sales pitch.
I have actually been able to anticipate what their questions are before they ask and then demonstrate we’ve got it covered.
It’s risky to build it before you made a sales call, but it’s paid off every time. I wouldn’t have nailed the deals had I not took the risk.
I enjoyed the article. It made very practical points. The other advantage entrepreneurs have is the ability to adapt more quickly to unspoken customer needs. While the giants speak with customers as well to understand future trends, a small business can be more responsive. I have seen small businesses develop new products and services as a result of constantly talking to clients to better understand how the company can increase its value. Usually the customer cannot articulate what they need. As a supplier/partner it is imperative to use your expertise to draw out unmet needs. It is then your responsibility to discuss how your firm can develop a service to fulfill those needs.
As the article stated, the giants have too much bureaucracy to be as responsive to unmet needs. That is another competitive advantage of a small business.
As a small business, we have a lot of things on our side that the giants don’t. I think where small businesses can really stand out is by going out of your way for your customers, as Ryan said, wow your customers. For example, when one of our employees is traveling, we host a customer dinner. This is something you don’t see the giants doing, taking the time to engage with and create relationships with their customers. This definitely makes your business memorable and gets your customers talking about you…WOM is an extremely powerful tool!
Your book sounds amazing!
In my business, I’m up against “giants” all the time. I’m also up against en entire industry at times, which is somewhat old-school, and definitely not very transparent.
I’m the opposite of old-school, and I’m constantly pushing the envelope, as it’s how to win, as you have so eloquently stated in this sneek peek of your book.
One more thing; I don’t have paid “members”, or even shareholders to please, as I go about my day trying to capture the hearts and minds of everyday people who want a fair shot at the American Dream.
The Franchise King®
Very interesting article, I think using small business peculiarities is the key of success instead of trying to mimic Giants strategy or methods to compete them. Todays technology give us access to powerful tools which can be very effective when properly used. 15 years ago, only giants had access to those tools.
JHN Design Agency
So AT&T can be brought down? A serious question. They seem to have their fingers into everything everywhere.