The American colonists knew Britain's army was much larger and that fighting the same way the British fought would lead to a fast defeat. They had to play a different game in order to compete with and beat their much larger competition.
My company, Apptopia, successfully competes with larger companies that have more employees, funding and resources. In addition to being purposeful with our money, we focus on two things: making their product weaknesses our product strengths, and customer relationships that start before we ever know if they're going to pay us.
Our main competition has eight times the number of employees and more than 30 times the funding. We went from nothing to being a thorn in their side, to being a respected top-three player in the space. This is how we do it:
Find the cactus in the desert.
Now cut it open, bottle the water, and sell it. It appears as though the big player has it all covered, but they simply can't.
There are advantages to being big and there are advantages to being small. Fighting a big competitor with the same strategy but with less money is a losing battle.
What can't the competition do? What do they struggle with? Where are their missed opportunities?
Research is key. We built a similar product but they had the name brand, so we spoke with prospective clients and current clients of our competitor to understand where they fell short.
What we ended up doing was packaging our data in a way where there was less work for the end user. Now our customers didn't just have data, they were able to visualize and consume the data in an easier manner, complete with clear takeaways.
Some large companies do an amazing job, but many times they are big enough to ignore the holes in their ship. Position your company into those holes and make them bigger until their ship starts to sink.
Just don't do it. This sounds like a low bar, but you'd be surprised at how much someone will think you actually went above and beyond by just being nice and treating them like they matter to you.
We try to invest as much time as we can with each potential customer. This can include preliminary work with no charge just to prove that we're ready to help and we have great insight that they can benefit from.
Sometimes there is no payoff at the end. Other times they are immediately blown away by our commitment to getting them answers to their biggest problems. If it doesn't work out, the hope is they come back to you one day down the road or they tell their friends.
This has worked out for us overall but there are definitely companies we spent a lot of hours and manpower on that have not paid off for us--yet. Again, chances are larger your competition views these practices as inefficient.
Take advantage. Take what they give you.
Between specializing in their weaknesses, using our money as smartly as we can, and being ridiculously good partners to those who haven't even sent us a check yet, we've been able to take large household name customers from our largest competitor. Let me tell you, nothing feels better.
Good luck and feel free to ask me questions. Maybe I can provide some insight or inspiration.