tirsdag 23. mars 2010

5 ways startups can slay giants

(Editor’s note: Dave Kellogg is CEO of Mark Logic, an information infrastructure software company. He submitted this column to VentureBeat.)
I’ve spent my career competing against companies 10 to 1000 times bigger than mine, winning more than my fair share of skirmishes along the way. It’s definitely an uphill battle, but here are five rules I’ve developed that will maximize your odds of success when pitting your startup against the giants of your chosen industry.
Split pins – Many technology strategists are familiar with Geoffrey Moore‘s “bowling alley” model, which says that startups should view markets as bowling pins, using one market to knock down the next. This model encourages startups to skip through markets hastily, like American tourists skipping through countries in Europe.
Instead of skipping pins, though, split ‘em. At the risk of sounding too cosmic, look for micro-alleys within bowling pins.
When I started at Mark Logic, I thought “publishing” was a pin and that all publishers were basically the same. Yet when I focused on publishing and looked for differences between publishers, I learned that STM (Scientific, Technical, and Medical), education, news, market research, credit/financial, legal, trade and B2B publishers were all dramatically different.
I like to say that all beagles look the same … unless of course, you’re a beagle. By splitting pins instead of skipping them, you learn more about your customers’ unique needs, which in turn allows to you to serve them better. Best of all, you’ll discover that the market you were about to skip over is significantly bigger than you originally thought.
Work together – There are too many examples of divisive, prima-donna-laden startup cultures where staff meetings devolve to finger-pointing contests. Startups can’t afford to waste energy. When you’re competing against giants, you need the extra advantage that comes from brilliant people – working together – to solve problems.
It took years to get this lesson through my head, spurred by an exercise at a leadership program where each individual rank-ordered a list of items required for wilderness survival. Then we broke into about eight groups of six and re-did the exercise. The worst group score beat the best individual’s score, and one of the participants was a Brigadier General in the U.S. Army.
While it may sound hokey, teamwork is an amplifier of talent. That’s why All-Star teams often perform below par in sports. While each individual may play superbly, the team just doesn’t play well together.
Concentrate force – The easiest way to be bigger than your competitor is to focus. It’s hard, though, because there’s always the distraction of opportunities you’re not pursuing. You need a clear sense of your growth goals to decide rationally if you can meet them with your chosen focus areas.
Hire stars – Giant-fighting startups are not places for the weak or squeamish. They’re also lousy places to learn on the job. That’s why VCs tempt experienced managers with safe jobs in big companies with nice chunks of equity. They want to lure them into startups and compensate them for the risk in so doing.
In the end, VCs are not risk takers; they are risk eliminators. They strive to isolate all risk to the fundamental innovation and do so by setting every other lever of the business to standard.
That’s why you need to build an A-team and be sure the people on it are scaling with the company. Rest assured, even if you’re not asking the “Can they scale?” question about your team, the Board is asking it about you.
Be the best - Face it, no sane person wants to buy software (or any other service, really) from a startup. Most IT folks sleep much better at night buying from the mega vendors, even if they feel they’re getting gouged on price. People buy from startups because they have no choice … not because they want to.
So how can you give prospects no choice but to buy from you? Solve one problem better than anyone else in the world.
Admittedly, that’s easy to say, but hard to do. The trick is determining the one problem that you can really solve better than anyone else in the world – and not tell yourself a white lie about where you can win, often in hopes of addressing a bigger customer base.
If you fall into that trap, you’ll almost certainly spread resources too thin and end up with multiple mediocre products instead of one great one. Andrew Carnegie said it best: “Put all your eggs in one basket and then watch the basket.”

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