James Dyson, Dyson Inc.
Sir James Dyson's company, based in Malmesbury, England, had sales of more than $1 billion in 2007.
Q My industry is filled with companies larger and better funded than my own. How can I use my small size to my advantage?
Hannon Hill, Atlanta
You probably have a number of fantastic advantages over larger companies, one of which is the ability to remain flexible and open to new technology. Before I started my own company, I approached large competitors about licensing my vacuum cleaner technology. It was very interesting to watch them all reject it. I saw the inertia that prevented them from changing their strategies or being at all interested in producing a better product. The rejections inspired me to go out on my own.
Big companies are slow to adopt new technologies, so you can beat them by investing in research and development. It's easier for a small company to take a risk by putting cash into R&D, because you're not beholden to thousands of shareholders. Of course, you may have some investors. And you may be tempted to spend on marketing instead of research, because advertising will give you a much quicker return on your investment. In the long run, however, your ability to develop new technologies is the advantage that will help you beat Goliath.
For example, we spent millions of dollars building our Airblade hand dryer. It took us 11 years to develop, and after seven or eight years, people were beginning to wonder if this was a good idea. But if you're willing to wait--not necessarily 11 years, but five to 10 years--the returns you get can be phenomenal.
As the owner of a small company, you're not tied to old-fashioned notions of what your industry is and what you're capable of building. We knew we didn't have to be a vacuum cleaner company, and we're not; our company is built around a passion for producing new and better products. Focus on who you are, not whom you're competing with. With no previously defined market, you can go off in any innovative direction you like.
There's another advantage you have because you're small: Today, we're still a private company, owned, as it happens, only by me, because no one wanted to invest in us while we were small. And we've been lucky enough to stay who we are.