Small ball is traditionally a baseball term applied to a scoring strategy that involves singles, walks, stolen bases (all easier to create) all coupled together to manufacture a run as opposed to hoping for the big swing for a home run (which are more difficult to make happen).
In the context of a startup and especially in an emerging market area, some companies are content to play small ball as a strategy to build their company. In a region where a lack of capital and hyper-relevant experienced mentors (home run hitters) creates additional challenges, I applaud companies that work around those to create business momentum. But there are just as many negative consequences of that approach and you need to be aware of those.
This July will mark 10 years of my living in the Raleigh/Durham North Carolina area of the country, which is referred to some as RTP (Research Triangle Park) or "The Triangle". To date we have thankfully not tried to adopt some cute area moniker like Silicon BBQ.
There is much written these days about the "Rise of the Rest" as coined by Steve Case and I am a firm believer that great companies can be started AND executed outside of San Francisco and New York City. This is now and integral part of my life's mission and the basis for my investment of personal capital and time in The Startup Factory. My thesis is that there are at least 10 areas of the country that are poised to deliver on the promise of the rise of the rest.
My challenge is then to identify, invest & mentor the best companies and The Startup Factory is my vehicle to do that. With 31 investments over the last 3 years and another 1,000 companies that we have interacted with, I have seen many versions of small ball in an emerging market.
Big Fish-Small Pond. Being the best company in Durham, NC feels good but means nothing and is no indication to the long-term success of your company. Unfortunately I see this over and over again. A local company is launched and we start to see them at our Open House and Pitch Day. They apply to be part of our investment program and are accepted in a few months later. The next thing I see is that their lead slides have our acceptance as a critical milestone. Scarier is a general attitude shift that is leaning more cocky than scrappy. Keeping with the baseball analogy--we are still in the first inning. There is a lot more game to be played.
The Force Multiplier. The startup world has sharp edges and is not for the faint-of-heart. Duh--you have heard that one too many times. Managing your company to avoid the sharp edges i.e. playing it safe and winning those small little customer battles has some merit but you also risk the big break out. Big companies break big because they create a force multiplier. A force multiplier is some action that when added to the current business significantly increases the business. This could be a marketing strategy that immediately scales your customer base. Or a business development deal that materially lowers your distribution costs. Back to baseball. Just because you play small ball does not mean that you don't enjoy home runs. You just have to be ready to play that strategy when appropriate.
Winning your local pitch competition is a personal feel good moment but don't let you, the team or the local advisors over play the importance of that small ball event.
Scaling your customers from 5 to 7 is progress but not earth-moving. What can you do to scale that to 15 or 25?
Small ball is a solid first-year strategy but eventually you will have to break out, change your strategy, and swing a little harder.