Slaying giants is fun, almost every new disruptive company slays a giant or two. Last week I had a chat with a team based in Puebla Mexico working on a cool augmented reality application for museums. They asked for my thoughts on their app and business model, I happily answered their questions. One of those questions comes up every time I talk with startups: How do you protect yourself from giants who might copy your idea?
For those of you who are up against incumbents, which is most everyone, here’s my answer:
Don’t compete, Out-think
Play the game you know you can win.
Create a space for yourself that only you can own by doing what everyone else is unwilling to do. This is how all innovators win.
A quick story on how I applied this is the second startup I was a part of The Jumpitz; a kids entertainment group. This was in 2008, the iPhone was just getting warmed up. When I joined the company, one of the first questions I asked the executive team was: are you aware of the giants (PBS Kids, Nickelodeon, Disney) that exist in this space?
They were aware, but didn’t have a coherent strategy for out-thinking industry incumbents. So, I took it upon myself to develop an alternative strategy which challenged assumptions and played to the strengths of our startup: shock and awe.
The strategy was to present ourselves to our audience where they’d least expect a kids entertainment group to show up, and where the industry giants wouldn’t think of showing up either because it would be “below them”.
That last part is key, because it challenges a giants assumptions and beliefs. You want to do things that they find uninteresting, challenging and outside their experience. The added benefit is this gives your audience a surprise, you reset their expectations.
The strategy worked, and pretty soon we got the industry’s attention because we looked and acted differently. Our business model wasn’t that different from anyone else, one giant actually copied our concept, but the way we approached marketing and community building was different. For example, up until that point, crowd-sourcing was not a word you heard a lot much less did. I believe we were the first artists to crowd-source the writing of a song to our community, which was then included in an album.
(This is brief description of what we did, ping me if you want to know more about this story, tactics and objectives)
Disruptive ideas have less competition
To be clear we had funding, but not to go head to head with giants; it’s a game we couldn’t win. We all recognized that, and understood we had to play a different game to win.
Giants are not disruptive by nature, rather they wait until it’s evident something is happening and react. So, if an idea has disruptive potential, it should make your competition uncomfortable; and that’s your space of opportunity.
Giants rarely put resources into ideas that challenge their assumptions and core business model because they don’t want to mess around with something that already works for them. Stability is too important for them, so their resources are focused on maintaining the status quo rather than exploring alternatives.
It’s very simple: Big companies have resources, what they don’t have is courage. By optimizing for their current business model, they set themselves up and ignore anything that is outside their model.
As a startup, that gives you many new options and ways to change the game. The most disruptive of all is to change the business model. In our case we weren’t disruptive in the traditional sense because we didn’t change the whole business model, we questioned and rethought parts of it and won a space we could own by acting differently.
It’s rare that a startup outruns giants. Even though our company had international presence at one point, we couldn’t outrun them and eventually got bought out for various reasons.
Bottom line: If the game is designed for you to lose, don’t play that game. Play a different one. As a leader and entrepreneur, remember to always challenge assumptions, because it isn’t simply about being faster and cheaper, it’s about being different.