How can small software startups beat the SW giants?

Fly like a rocket boosted turtleYes.  They can.  You can.  And this is exactly what this blog is about.  My purpose in starting this blog is to provide tips and ideas for small and medium software companies (especially startups), on how to kick some big corporate butt.  If you are reading this and you work for Microsoft, Oracle, SAP, IBM, CA, etc – this is not the blog for you… or maybe it is, because you are going to end up buying startups that kick your butt, which should probably make everyone happy.  Just try not to mess up their software and their customers after you buy the company, ok?

Big companies have massive resources at their disposal, armies of marketeers and sales people, hoards of customers, and seemingly infinite presence.  Funny enough – this is also where your opportunity lies, because the flip side of this very fact is also their weak spot.  Their massive sales & marketing machines are like aircraft carriers – they are powerful, loaded with weapons, omnipresent, but also take a long time to change course and they work according to predefined procedures.  Flexibility is nonexistent, and unknown/bold tactics are almost never used.  They also carry a lot of baggage with them in the form of reputation & corporate standards.  For many large companies, their truly creative sales & marketing people are buried in some corner of a side department with a corporate style manager asking them whats the status of their sales.  This is not to say that the large companies are not smart. They ARE smart, VERY smart.  They did not get to be the biggest and best in their field by being bozos.  However, they do have an inherent weak spot created by their size, and this can be exploited.

In following posts I’ll start including some tips and techniques that should help you in fighting the uphill battle, but the first thing any small company should ask itself whether the 3 basic pillars of SMB sales success are in place.  Without these three it will be extremely difficult for you to succeed.  You might still make it, but you will definitely work much harder at it, and your sales & marketing budget will be much larger than it would be if the 3 pillars of SMB sales success are there .  So before you do anything else, answer these:

The three pillars of SMB sales success

  • Will your software make your customers happy? Seems like a silly question, but it is a critical one.  Your application does not have to be the richest or most feature-loaded, but it does have to deliver on the promise.  Its clear that you will have lots of bugs in your early releases, there is no way around that – but you must be willing to go the extra mile to make your early customers happy.  At the end of the day it needs to work and to fulfill the promises you made to the customer.  Pulling all-nighters to fix the early customer problems is fine, but its not a long term solution.  Make sure you are on the path to delivering good software, if you are not, be prepared to spend tons of money on sales and marketing, because you will not have the worlds number one salesman on your side… the customer.
  • Did you position your software as being able to solve a clear problem with clear pain-point? The easier it is for you to clearly state the problem that your software solves and the more repeatable the customer pain is, the better.  This means that if you can identify the types of companies that all have the same problem you are trying to solve, and you can know with a high degree of certainty who is the person within the company that has the pain – your road just got a lot shorter.  Now the application you are developing might do wonders for the entire universe + god, but unless you have gigantic pockets the only way to get started is to try and identify one slice of a vertical market (preferably in one geography) that has the same painful problem that your software solves and dominate that market only. Position your software as solving that vertical problem only, and from there you can expand and conquer the world.  What you first need is repeatable success, good customer references, good branding, and a sales cycle that is getting shorter and shorter so that you can get your head above the water.  You will also need this niche safety net when things get bad (and they will), this will be your home turf which can keep you afloat through the bad times.
  • Are you prepared to be different? are you ready to use sales & marketing techniques which are new and different, where success is not guaranteed?  the good news is that its cheap, its measurable,  and you can be very successful at it if you can think outside the box.  As we have seen over the last decade, the internet has reinvented itself every couple of years.  We have social networks, streaming video channels, blogs, micro-blogs, twits, feeds, dynamic user groups, floating information exchange, technology mashups and much more.  People are floating en-mass from one cool information platform to the next, and you have one task and one task only…  What you need to do is to make sure that you find the right places where your target customers are present, and stand out by making your message to them in a clear, exciting, and different manner. So be ready to be bold, be ready to be different, and be ready to be cool.

I bet you want the actual tips now, right?  Look out for posts with the STARTUP category checked.

  1. Nice posting. What you said about picking ONE vertical in the beginning is very important. It’s similar to what the organization I work for now did in the early days. Our first customer was a automotive brake manufacturer, and so was the next and the next one after that, until we had many of the major brake manufacturers as our customers. We’ve eventually moved on to serve more companies in different industries, but it’s definitely all about getting the ball rolling and building momentum in the beginning.

    Sweet blog! I’ll be back…


  2. “Big companies have massive resources at their disposal, armies of marketeers and sales people, hoards of customers, and seemingly infinite presence. ”


    • robert954
    • March 2nd, 2010

    Above blog is really need of the small software developers.The things written by him is very good and also very helpful to take up your software….

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  3. This post is really useful for small software firms and developers.I hope they will take some advice from this post and get benefit.
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