Five Rules for Competing with Giants

I've spent my career competing, for the most part successfully, against companies from 10 to 1,000 times bigger than my own. Thus, over the years, I've developed some rules that can help maximize your odds of success when competing against giants.

• Concentrate force. The easiest way to be bigger than your competitor is to focus. While Oracle was around 100x our size when I joined Business Objects, our BI team was bigger than theirs; in 1995, we had nearly 300 people who did nothing but BI. Focus can be about either product or market. At Mark Logic, I believe that Endeca is around 2-3x our overall size, but by my estimation Mark Logic is 3-4x bigger than they are in our core markets of media and government. While Autonomy is more than 10x our overall size, I believe that we may be bigger in media and government (for relevant use-cases), and I'm nearly positive that we're bigger in the dead center of our markets: STM in publishing and intelligence in government. Focus is hard because there are always people who are more obsessed with the opportunities you're not pursuing than with those you are, so have a clear sense of your growth goals, decide rationally if you can meet them with your chosen focus areas, and then jettison those who can't get with the focus program.

• Be the best. I like to say that no sane person wants to buy software from a startup. Most IT folks sleep much better at night buying from the mega-vendors, even if they feel like they're getting gouged on price. People buy from startups not because they want to, but because they have no choice. How can you give people no choice but to buy from you? Solve one problem better than anyone else in the world. Those are easy words to say, but they're very hard to do. Ask yourself: what is the one problem that we can really solve better than anyone else in the world. That's what the VC cliché "world class" means. Most startups aren't honest with themselves in this department; they tell themselves white lies about where they can realistically be the best. The result is they overextend and end up with three or more mediocre products instead of one great one. Sometimes this is driven by greed for more addressable market; sometimes it's driven by fear and the desire for diversification. Remember the Andrew Carnegie quote: put all your eggs in one basket and then watch the basket.

• Split pins. Most technology strategists are familiar with Geoffrey Moore‘s "bowling alley" model which says that startups should view markets as bowling pins, using one market to knock down the next. This model encourages startups to skip through markets hastily, like American travelers skipping through countries in Europe (e.g., If this is Tuesday, it must be Belgium). Instead of skipping pins, startups should split pins. Without sounding too cosmic: look for micro-alleys within bowling