A Bootstrapper’s Survival Guide Against Established Competitors
Competing in a market with a clear leader is a bear, especially if you’re a small business. Years ago I used my mad public relations skills to do capital stewardship campaigns for churches. My competition was a clear market leader and he was cleaning my clock every which way I turned. It was not fun. But I learned some stuff in the process that still helps me today.
If you’re the little guy competing in a market with a big gorilla, the first thing you need to do is figure what he’s got that you don’t.
5 Big Things Market Leaders Have
Market leaders rarely rise through serendipity. They have lots of customers. They have huge top numbers and healthy bottom lines. Big companies have five key leverage points that small businesses do not have, and they capitalize on them every day.
- A Network of Distribution. Market leaders succeed because they can afford to hire lots of salespeople. They have booths at trade conventions and premium ad space in industry magazines and websites. They have a network of the largest, most successful clientele in their field and they have no problem getting their services in front of the market.
- Access to Capital. These gorillas can get their hands on a lot of money anytime they want it. They don’t have to put up personal guarantees, pay high interest payments, or do downside risk estimates. If the market can be bought with cash, market leaders can and will do it.
- Brand Equity. Market leaders treat their brands like long-term assets. They invest millions of dollars building a brand name. They have a lot of brand equity. People in their market tend to trust anything they do. Every day, market leaders get to extract the profit that comes from having a huge market share. And clients are like sheep. They tend to follow the brand leader.
- Customer Relationships. Market leaders have a tremendous advantage in that they can pick up the phone and meet with almost any leader in their market. In established markets, this is a huge advantage.
- Great Employees. The brightest minds in an industry tend to migrate to the market leader. The big dog company has a lot of exceptional people on the payroll. These folks were drawn to work for the market leader because it has a great reputation, offers stability, and pays well. Big companies leverage their people to the hilt. They employ incredibly talented people
When I figured out the big five things that my competition had that I did not, it bummed me out. How could I compete? Winning a client against established competitors is one thing, but when your market has a clear leader, it’s a whole ‘nother ball game.
After walking around in a daze for a few days, I thought surely I have a chance to succeed. There have to be some things that the gorilla has overlooked that gives me an advantage.
7 Overlooked Advantages Small Businesses Have
Does a small business have a chance to succeed? No. Not if I try to compete head to head in those five areas that the gorilla has the market on. Not if I try to act like a big company. If I try to steal the giant’s lunch, he’ll probably eat my lunch. But I’m not washed up either. There are at least seven things that I can do now that give me tremendous advantages as I compete against a market leader.
- I’ve Got Nothing to Lose. Everything is straight up from here and I’m hungry. This is huge. My big dog competitor has been doing this for a lot of years. He has systems and quotas and established traditions to maintain. He is like an army of locusts with consulting fees so exorbitantly priced that he rarely works with a customer on more than one project. The problem is that he has to go after the big fish to survive and the market has changed since he first entered. There’s opportunity in new niches that haven’t been fully exploited. And the gorilla is still doing it the same old way to the same old customers. But these customers are getting smarter. They are looking at what he delivers and the price tag seems way too high for what they are getting. There’s a place for a hungry guy like me who has nothing to lose. This is an advantage.
- I’m Completely Happy with the Small Fish. A gorilla has to eat a lot to be happy. I can make do with crumbs. There’s a lot of room in the market for a small business like me. I can operate anonymously, completely under the radar, and it won’t hurt my ego a bit. This is an advantage.
- I’m the President. It’s true when the president of my market-leader-competitor company wants to have a meeting with the mayor of Dallas, odds are that the Honorable Mayor will make time for him, after all he is the president. But in a big company like the gorilla’s, I would be willing to bet all my enchiladas that Mr. President is far removed from the day-to-day action. He has people who are getting the job done for him. Except for high-profile clients, Mr. President rarely gets in on any of the action. But with me, it’s a different story. I am the president of my company and I have a lot of interaction with my clients. I can use this power and flexibility to wrap myself around each and every customer to make myself indispensable. The people I work for, get to work with the president. This is an advantage.
- I’m Very Fast. An office full of people with slow-moving bureaucracies, being meeting-ed to death, and who have a slacker mentality, can’t get the job done faster than me. They can’t hire nine women to work really hard on a team and produce a baby a month. Just because the gorilla has an organization doesn’t mean he is faster than me. I can do it myself and I am very fast. Today, I don’t have one committee meeting to waste my time and energy on. And because I’m a small, high-performance team, the only way I can survive is to stay focused and work like my life depended on it. Come to think of it, my life and my precious wife’s, and my family’s lives do depend on it. That’s why this Andover Paper is my survival guide. I’m fast and this is my ace in the hole.
- I’m the Underdog. I’ve been to a lot of Super Bowl parties where the two teams playing didn’t mean a lot to anyone in the room. Most of the time, my friends chose to root for the underdogs. I’m the underdog here. There are a lot of people around me who are rooting for me and who are more likely to spread the word about me and activate some really good referral networks for me. Being the underdog is an advantage.
- I Don’t Have Overhead. I am lean and mean. I don’t have a business affairs department, HR or an accounting team. I don’t have a company car or a VIP parking place. There aren’t a new crop of interns waiting to work here. I can do what the big dog does, for a whole lot less money. The service I create is between my two ears. It doesn’t need a corporate jet to deliver the goods. Right now, my monthly survival numbers are stinking low compared to the man. I don’t have any overhead and this is an advantage.
- I’m in Charge of My Time. This doesn’t mean that I have time to waste. I still have to apply knowledge to work to increase capacity; and I’d be a slacker if I didn’t apply logic to what I do to increase my productivity. But this doesn’t mean that I have to rush things or hold things back just to meet quotas. When it counts, I’ll work my tail off to get things done and out the door ten times faster than the big guy. But when I can make a difference by taking my time and doing it right, I will — and it will show. I control my time and use it to my advantage.
Just as important as what I do is what I don’t do. Here are five ways I can position myself against the big guy by redefining him.
Five Positioning Strategies to Redefine a Market Leader
- Distribution. I can’t afford a massive digital marketing campaign. There is no way I can get ad space in trade journals. I’m a bootstrapper remember. So, I’m going to start by selling my services directly to just a few customers for lots of money per sale. I’m going to leverage what I know about inbound marketing to my advantage.
- Access to Capital. I’m going to be “missionary cheap” in everything, so much so that it’ll make access to money a mute point. When I do need capital, I’m going to “borrow” it from my cashflow. There is no reason to go into debt for anything.
- Brand Equity. The best way to redefine a market leader is to position myself against him. There is a big difference between positioning myself against the big guy and competing head-to-head with him. I’m going to be “cheaper than the gorilla”; “faster than the gorilla”; and “cooler than the gorilla”. The more his brand gets publicized, the more my positioning strategy increase in value. I’m going to show the temerity that God gave me in the way I compare myself with the man. My story will be short, solid and memorable. I will always remind myself that I don’t have enough money to act like a big company. And that way, I will survive.
- Customer Relationships. My strategy is not to go after the Mayor of Dallas’s business. He has too many layers in to get a meeting. And it’s just too easy for my competitor to defend against me. Instead, I’m going to go after a beachhead in my competitor’s market. Then with great service, slowly but surely, I’m going to increase market share by relentlessly focusing on one client at a time. And I’m going to go after the kind of customers that don’t fit the gorilla’s machine. By the time my big-dog competitor catches on, it’ll be too late.
- Great Employees. I’m going to stay intentionally small. My wife, Suzan, and I are great employees because we can work for a long time without a paycheck. Meanwhile I am building out my team from recent college graduates. I don’t want to have to retrain the stupid things more “seasoned” employees learned from their previous employers. It will take me longer to get to where I’m going. But I’ll enjoy the journey more, we all will.
Thanks for reading this post. Writing this Andover Paper really helped me put my head down and work through a very competitive season for my company. I called it the “Andover Paper” because for me “It Was Over”, with God’s help I would survive. I hope it helped you too. If so, please leave a comment below. Blessings.