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David vs. Goliath: How Small Companies Make It Big

The world is full of entrepreneurial upstarts that took down industry giants. It happens all the time. Here are five winning strategies.

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Everyone loves a David versus Goliath story. When we see the little guy win against all odds, we know that anything is possible. When it comes to business, that's absolutely true. History is full of upstarts who slugged it out with industry giants and won.

Remember that Apple was once a little garage shop that took on IBM and software behemoth Microsoft--and ultimately came out on top.

And once upon a time, a bunch of California farmers had the audacity to think they could make wine as good as the French winemakers that had dominated the global wine trade for centuries.

Whole Foods' John Mackey, Southwest Airlines' Herb Kelleher, Virgin's Richard Branson, Fedex's Fred Smith: there are thousands of entrepreneurial Davids who took on Goliaths and won. It happens every day, but not by itself.

Certain marketing and business strategies enable Davids to slay Goliaths. Here are five. 

Be a niche player. Believe it or not, starting with a niche is one of the most powerful ways to go viral and ultimately take down even the biggest giants. The trick is to determine the right niche and positioning for your product or service. Mark Zuckerberg didn't set out to get a billion users and Google wasn't trying to become an advertising giant. Social networks and search technology were all niches, initially.

Take the battle to Goliath--in the media. Who can forget Apple's 1984 Super Bowl ad that launched the Macintosh against Big Blue's IBM PC. Or how California winemakers went up against the French in the famous Paris Wine Tasting of 1976 that was portrayed in the movie Bottle Shock? How can people root for David if they don't even know there's a battle going on? The only caveat: you have to win.

Be different. No, you can't just look different, act different, or seem different. You actually have to be different. You have to create something that appeals to an audience in a way that the big guys don't or can't do. Compaq made the first commercially viable portable PC. Michael Dell made computers truly personal: custom made, one at a time, shipped direct to customers. Southwest went with regional airports and offbeat service. If you want to beat Goliath, you have to be different.

Partner to be first to market. While all the 800 pound gorillas rest on their laurels, nimble and aggressive companies can take the lead by partnering with others. Compaq actually beat IBM to market with the world's first computer powered by an Intel 386 processor. Dell would later eclipse Compaq using the same strategy--even partnering with the same company, Intel. Likewise, universities are great places to find innovators and innovative technology looking for a way to get to market.

Appear bigger than you are. The hardest thing about being a David is that customers still need to know they're getting a solid product and good support for their money. So differentiating isn't enough. Attention to detail is important. So is great customer service. Luckily, just about any company can appear far bigger than it is by outsourcing and leveraging ecommerce and social media. The internet really did level the business playing field.

Just remember one thing that trips up a lot of start-ups. It's a competitive world out there. You can have really cool technology or an exciting concept and end up going nowhere. The most important thing, hands down, is to deliver a unique customer experience that's way better than what's already out there. Pair that with one of these strategies and you may have a winner.

IMAGE: revolweb/Flickr
Last updated: Mar 27, 2013

STEVE TOBAK is a management consultant, an executive coach, and a former senior executive of the technology industry. He's managing partner of Invisor Consulting, a Silicon Valley-based strategy consulting firm. Contact Tobak; follow him on Facebook, Twitter, or LinkedIn.
@SteveTobak




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