How startups can use small wins to scare big competitors

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Devang is a TIA Star Contributor and publishes high-value content that serves the Asian tech community. Read more from TIA Star Contributors here.

The story of David and Goliath is perfect for the startup world. More accurately, it’s perfect for the competitive dynamics between early-stage companies vs larger corporations.

When these two vie for mindshare and marketshare in the same industry, startups need their proverbial slingshots to attack their bigger competitors and achieve success.

A clarification on success: In biblical times, David achieved success by actually slaying Goliath. While outrightly winning over the larger competitor could be the best outcome for startups, they can also win by growing so quickly that the larger corporation will want to acquire them.

Slingshots

When I was leading the business development team for a premier enterprise B2B company, I saw the David and Goliath scenario play out right in front of my eyes.

The enterprise 2.0 collaboration market (which came to be defined as using next-gen tools like wikis, blogs, comment boards, etc.) was small, as corporate users were struggling with use cases. Predictably, bigger players stayed out of it, concentrating on building and marketing larger but staid collaboration suites.

1. Validation by corporate buyers

All of a sudden the market grew and companies like ours began striking license deals with large corporations.

This was a classic slingshot: acceptance and validation of a fledgling product by some corporate buyers that are in the industries strategic to larger competitors.

These larger competitors were caught in a bind, as their large captive customers were looking to other providers for products/offerings, and their own product teams were a good 12 months behind in building next-gen collaboration capabilities.

So, they reached out to partner with us and to align go-to-market solutions. While the collapse of Lehman brothers and the accompanying downturn in the global economy prevented this from actually happening, it still serves to illustrate the point.

A couple of high-profile customer wins in a contested market can act as a slingshot that startups can use against Goliath-like competitors.

2. Key enabling technology

Key takeaways