You’re in a start-up, and you’re about to start competing against some giant company. As an entrepreneur, you know the drill. It’s you against Bill Gates or Jeff Bezos or Michael Dell or Howard Schultz, or even a two-headed monster like Sergey & Larry.
Let’s face it–the cards are totally stacked against you. They have SO much in their favor. They have:
- More Brains
- Better Technology
- An Army of Employees
- Buckets of $
- Huge Credibility with the Press
- Lots of Customers
They can outprice you and outlast you in any market they choose.
As entrepreneurs, why do we choose to fight this kind of battle? I’m prepping for a presentation I’m giving tonight at the University of Wisconsin and I asked myself that question. How can a start-up ever carve out a space, let alone win the game? Brian and I have had a few successful start-up’s (Brian has 3 to his name, and I’m working on my 3rd with him right now). Thinking about our experiences, I was able to come up with the ONLY three things that you have going for you as a start-up.
They are:
(1) Speed & Agility. Big companies can’t move as fast as you can. This is by far the most important advantage for a start-up. You may have a great idea, but I’ll bet that the same idea is kicking around the big company competitor too. The issue for them is that they have a huge organization to drag behind them. They can’t turn on a dime. You can. You can get there first. And getting there first is huge. Jellyfish is a great example of this. We hit upon a new, disruptive search advertising model and got to market with it first. Microsoft saw our head-start and liked it. If we had waited, taken too much time, over analyzed, we would have lost. In a start-up, lack of speed kills.
(2) No History. What I mean by this is that in a start-up have no baggage, nothing to protect. In a start-up, you can dream up crazy ideas, without any regard to protecting the company’s revenues/ employees/customers, or upsetting the politics of the organization. You are free to think of the way things should be if you could design the perfect world. You have freedom to try to disrupt the status quo. Most big companies worry what will happen if the status quo changes. They worry about protecting next quarter’s number. They worry about getting stuff through legal. You are completely untethered from these kinds of restrictions.
(3) A Different Kind of Employee. There are lots of really, really smart people that work for big organizations. But there is something that brings the best out of people when they work in a start-up. The start-up environment is so empowering and invigorating when you realize that you have a HUGE impact on the success or failure of your company. It’s on you. You have the power to change a market, and you get caught up in the journey and the mission. I’ve seen the power of a small committed team of start-up employees, and I’ve been fortunate enough to have a business partner that does a tremendous job of cultivating and leading the charge. Small start-up teams can accomplish amazing things.
So there they are entrepreneuers. Your 3 advantages. Use them wisely.
And if you were planning on coming to my talk tonight, I just gave away my best stuff, so you can probably just stay home 
November 20th, 2008 at 5:23 am
Mark:
Kindly let me know if your presentation will be visible later on video or scribe. Would love to catch it in person – unfortunately I am based in Paris part time and will only return to my place in Milwaukee on the 25th!
Good luck to Brian, “Team Alice” and yourself in the new venture.
Ping me via LinkedIN should you guys find yourselves in Milwaukee. I shall be happy to treat you all to some of MKE’s very best Beer & Brats!
Alexander
ps. I have tracked Jellyfish since its pre-launch days and your speed of execution, iteration and exit blew me away. Also, was a customer of Nameprotect a few years back and only discovered a few days ago that Brian and yourself were behind it!
November 20th, 2008 at 7:11 am
Thanks for sharing your thoughts here, and I love your blog. Also congrats on Alice.com to date. Great points made above; especially numero uno. I guess sometimes the race does go to the swift.
I know start-ups that can never get achieve lift-off because of their lack of nimbleness and because of over analyzing all of the details. In fact, such over analysis is so pronounced that often times they spend weeks if not months, developing a b-plan for a product or offering that has good potential in the marketplace only to get beat to the market by a larger player.
Not being an MBA; I often am not as guarded in my race to the top; however, recognizing the importance of market analysis, segmentation and targeting, how does one strike the right balance to remain fleet of foot, but also avoid walking toward an oasis in a desert that really isn’t there? Any words of wisdom to offer on this point?
Finally, perhaps the key to identifying a great business idea is more like recognizing porn–you know it when you see it.
Godspeed,
Dey
November 20th, 2008 at 9:42 am
Thanks so much for the positive comments. As to your question Dey, there is certainly a balance that needs to be struck between analysis and action. In our case, we have always tried to operate quickly off of a few critical data points. Brian in particular has a fantastic “gut sense” or intuitive feel of what will work and what will not. You need someone that has that sense in your start-up.
November 22nd, 2008 at 12:04 am
What if those monster competitors already do what you’re planning on doing?
Amazon, one of the most recognizable and trusted brands on the planet, has the Subscribe&Save program. I’m a happy customer. You get 15% off their already low prices and free shipping.
Why would I switch to Alice?? Can’t wait to find out the whole pitch someday, but I’m skeptical.
November 22nd, 2008 at 7:21 am
Great point Fred. I agree that you need certainly need to monitor/obsess/worry about what the big companies are doing at all times. If you can’t offer an improved customer experience for a market over a what the big company is doing, you aren’t likely to make it very far. I hope you see the enhanced value in what we’ve come up with at Alice.
November 24th, 2008 at 12:31 pm
Thanks for sharing the three great points which I’ll keep remembering. 1.speed 2. no fear to lose 3. A passionate & incredible team.
Four months to go. Good luck!
December 1st, 2008 at 12:36 pm
Your speech inspired a friend of mine in the MBA program to reengage on a Mobile Marketing start up I’m working on. I strongly believe it’s an important time in our nation’s history for entrepreneurs to rise to global challenges and to create 21st century jobs. Thanks again for your great presentation.
December 11th, 2008 at 3:12 pm
Mark,
I really enjoyed your presentation last month and blogged about it here:
http://natelustig.blogspot.com/2008/12/interesting-talk-by-mark-mcguire.html
Good luck with Alice going forward!
December 11th, 2008 at 5:45 pm
The positive comments are great to see! Thanks very much. Nate, I enjoyed your post.
January 16th, 2009 at 5:27 pm
[...] that a start-up has over the big boys is the ability to execute quickly. As I mentioned in my post on the 3 advantages of a start-up, if you get there first good things can [...]
February 24th, 2009 at 12:08 pm
[...] contracts, but you have to be able to spend or save strategically and with good timing. I read over and over that one of the biggest advantages of a start-up is agility. Being able to thoughtfully adjust your [...]
April 15th, 2009 at 11:52 am
I wish I could have gone to hear your speech but i am in Miami, but more than anything I am glad that Penelope mentioned your company in her blog as following your activities has been so inspiring – best of luck to the team Alice, I know you will do great things…how do I get involved with beta testing?
JT
August 24th, 2009 at 11:55 pm
[...] major succeed as an entrepreneur. For me, the most interesting parts of the talk were his “Big Three Advantages” to being a startup, taken from his blog. Mark’s three advantages are: Speed and [...]
September 12th, 2009 at 11:12 pm
Great post….I especially like the point about speed & agility. The red tape that someone has to go through in a big company can be quite hindering.
This is my first visit to your blog, I came from the Alice site (which I think is SO COOL, by the way) and I’ll be checking in from time to time.
February 10th, 2010 at 4:43 pm
[...] reading: How to Start a Startup, What Startups are Really Like, The 3 Advantages of a Startup, Entrepreneurs Come in All Shapes and [...]
April 8th, 2010 at 1:52 pm
[...] to summarize some of the things that startups need to do to succeed on this blog (see for example, the 3 advantages of a startup). But everything starts with this relentless will to [...]
September 14th, 2010 at 12:11 am
Mark, just game across your blog and your company. We are a start-up regarding our solution but veterans in the industry we are attacking. Being small,nimble and not having to ‘report’ to anyone (being the founder) definitely makes moving fast easier. The challenge is trying to balance budget with revenue benefiting programs while providing end user gratification and “stickyness”. Revenue comes from one venue while the “cool” features to keep someone coming back are not always in synch. The has been the toughest balance act for us. The other challenge is trying to stay current with technology (social media primarily) and staying current while not getting tied up with the ‘fads’ as not all SM apps will succeed I am sure.
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