We’ve all heard of the little guy battling it out with a giant, maybe you remember the story of David and Goliath, or maybe you’ve watched Rocky–an absolute underdog classic. It’s true, occasionally the underdog wins but in the real world, especially in Silicon Valley, the giant wins–most of the time.
For startups and entrepreneurs with a disruptive idea, it’s not easy to compete with massive multibillion dollar companies, yet startups are often faced with such an intimidating challenge. So how do startups–think Hulu and Netflix–become industry leaders and compete with the big leagues? Keep in mind that competing with your competitor or with the giants isn’t necessarily about beating them. Instead, battling the competition and big businesses is about establishing your own base of loyal customers and a large enough niche to become successful.
So how do you do it?
Simplicity is often key
Founders don’t always realize this but being the underdog and starting a fresh business has several advantages when going up against the big guys.
If your startup is kept lean, the number one advantage is its capability to launch without much bloat. This allows your startup to market a product that can be several times simpler than its competitors. Rather than offer a product with multiple features and does them just okay, offer a product that does less, but a lot better.
However, for the product people out there, it’s easy to get carried away with all the what ifs. And that’s exactly why it’s important to identify the one feature–or few–and focus solely on that. Take lead from Laurence McCahill, co-founder of The Happy Startup School–an incredible startup community where entrepreneurs and like-minded people are able to learn how to build a business that’s best suited for them.
In the article, “10 ways you’ll probably f**k up your startup,” MaCahill says,
“If there’s one thing that startups are often guilty of, it’s trying to do too much, too soon. Having a clear focus means it’s easier to communicate what your product is and who it’s for. By trying to appeal to everyone and adding features left, right and centre, you will actually dilute your message and could end up with a complex, bloated product.”
Your competition has paved your way
Having competitors means quite a few things. One, it means your job, as a founder, will possibly be more difficult, and two, to cut the list short, it means that a road has already been paved. So why not take advantage of it?
Reach out to all the PR, journalists and media agencies that have written for your competitor and explain why your product is different and if you can, provide a prototype. Bloggers and journalists are busy people so it’s important to immediately grab their attention.
On top of PR, which we all know to be one of the best ways to generate leads, your startup should also leverage your competitions stale leads because the truth is, every business has leads who are highly unlikely to continue their business with them.
Perhaps their product was overly complicated and your new simple is the new cool product fits their needs perfectly. You could purchase their stale leads by becoming another source of revenue for your competition.
I know, you’re probably wondering why on Earth would you help your competition.
For two reasons, to build a loyal customer base and to increase your market share!
Be fast and iterate quickly
There’s a reason why brilliant people like Eric Ries develop models like the Lean Startup. It’s so that we’re enabled to iterate super fast. With the Lean Startup, we’re able to learn quickly, build fast and build a better product with each iteration.
But this isn’t only achieved through startup methodologies. Each year new tech comes out, and each year we see something that’s more promising than the previous. For new startups, you can easily begin to utilize some of those amazing tools like Spark to create super fast data-driven applications or Arduino to prototype inexpensive yet functional products.
Using some of the new tech that’s out right now enables engineers, product developers and designers to implement their own ideas, test their hypotheses, and iterate over a cycle of development based on customer feedback. Take 42 Technologies for example. They’re an advanced analytics, reporting and data warehousing company that graduated Y Combinator’s accelerator program.
In the article, “ Four Strategies to Compete Against Big Corporations,” Cathy, the CEO of 42 Technologies states,
“As a newer company, we can start with a blank slate. We utilize amazing tools like Spark to build a data processing platform that’s more than 30x faster and better than current solutions. We also have two-week iteration cycles which allow us to constantly evaluate how we can improve.”
Here, the advantages of using new tech allowed 42 Technologies to implement a platform that’s far faster than the competitions.
Putting it all together
Entrepreneurs understand that it’s easy to get ahead of themselves. They also understand that going up against their competition is no walk in the park, regardless of begin a big business or another startup. What you should understand now is that it’s not impossible to become an industry leader even when other companies already control a large portion of the market. What discourages most is that it’s extremely difficult but as you can see, there are ways that you can use your new startup and big businesses to your advantage.