Acting Big

November 5th, 2009 by admin

Twenty years ago, it was much more difficult for small companies to achieve significant market penetration without extensive financial backing. As a result, those who controlled the wealth in the world got richer, and bootstrappers were restrained from achieving rapid growth.

That has all changed. Think about how easy it is for a savvy businessman to get a website up that is just as professional-looking as, if not more than, his large corporate counterparts. Think about how a small company can leverage its abilities by outsourcing aspects of its business. Think about how easy it is to create the illusion of “big.” It is no longer necessary to have a large building with a huge internal staff, even in service-oriented businesses. With blogs, the Internet, cell phones, YouTube, text messaging, and social networks, it is almost hard to not get recognized if you do really great work.

With our modern small-business advantages, I believe it is almost more difficult to compete as a large company. Large companies carry the burden of bureaucracy, too many employees, and a lot of overhead from buildings and expenses. There are, however, three things that larger companies do have going for them:

  1. More resources and capital
  2. Strong reputation and branding
  3. Expertise and stability

Any company can survive for a period of time without fulfilling the first two, but the last one is vital to getting your venture off the ground. It’s where you need to focus—and where you can create the required image. Google proved the power of starting with number three above and then adding one and two. Larry Page and Sergey Brin, after meeting in grad school and finding themselves somewhere beyond strapped for cash, charged a terabyte of disks to their credit cards and assembled them in Larry’s dorm room at Stanford. Their idea for a new search engine was really quite ingenious, and they knew they just needed to be patient while they gathered all the needed resources. As they did so, the young programmers moved up the Internet food chain quickly enough that after about a year, they had to move their company into their friend’s garage. Surrounded by rusted bikes and kitty litter, they kept programming as they had in the musty college dorm. In this environment, they were surprised to suddenly land their first legitimate funding. When it happened, they realized they hadn’t even set up an actual business entity or a bank account, so they had to sit on $100,000 while they scrambled to get a place to deposit it.14 What a success from such a small start! But do you think they introduced themselves to potential venture capitalists by saying, “Well, we’re only in a garage right now, but we think we’ll get
bigger”? No.

Porter’s Points –Acting Big

  • If you don’t have a big office, don’t worry.  You’re an entrepreneur. You have big dreams— let those be your office, and act like you mean them!
  • Learn from the way large and small companies work. Do their ad campaigns give them a professional image? How about their employees? Emulate the good things they do in your up-and-coming venture.
  • What was the last personal service you received? How was it provided? Could you tell if the provider was a large company or took calls in its basement? List the things that impressed you. Those are the positive attributes you should adapt for your venture.

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