Trends vs Hierarchies, David vs Goliath

Trends vs Hierarchies, David vs Goliath.

Small Goliaths

About five years ago, when I was working in a startup incubator, I noticed a strange habit from entrepreneurs. No matter how small their companies were, they tried their best to mimic the behavior and the appearance of big corporations. For example, when they learned about Google’s AB testing of 40 shades of blue to increase clicks on buttons, they tried to replicate the experience on their own websites. Keep in mind, most of them weren’t making any significant money yet and they were lucky if they hit a thousand visitors a month on their website. But if it’s good for Google, surely, that’s good for us” was the rationale. They didn’t factor in the idea that differences in scale imply differences in optimal strategy. They would also communicate on social media in the same bland, overly-PC tone as your average Fortune 500 company. But nobody was impressed by this corporate style. Nobody read their forgettable posts and thought what a serious and mature company, I’d like to interact with them some more”.

As Jordan Ellenberg put it in How Not To Be Wrong:

Nonlinear thinking means which way you should go depends on where you already are.

These entrepreneurs failed to realize that being much, much smaller meant that they had to play the game very differently than big corporations do. And, in the process, they ignored some edges they possessed. If you’re David, you shouldn’t try to become a smaller version of Goliath. You need to play your strengths and become the best version of yourself.

Growth and Focus

We live in a world where trends matter more than hierarchy. Growing fast can make up for being powerless.

Top-charting musicians need the intensity of fast-growing acts to stay relevant. This is why they are willing to collaborate with promising up-and-comers. A small artist growing fast in popularity can sit at the table of a mogul slowly losing fans every day. They can trade intensity and speed for influence and resources. The fewer super dedicated fans of David can be more valuable than the far more numerous lukewarm amateurs of Goliath.

In a dynamic world, your growth and your focus are insanely precious resources.

This is also true for businesses. What big companies cannot do is to provide perfectly customized products and services to all their customers. They go for good enough for a very large audience. It doesn’t mean that their products are not good, it means that it is not worth it for them to try to build and communicate products addressing very small niches. This is how smaller companies can win, by catering to this uncomfortably narrow audience to get a foot in the door. And they don’t have to speak to them in a boring corporate voice. It’s an incredible asset for a smaller company to be able to talk in a more relaxed, informal way to their users and be very specific in their communication. Embrace it.

It’s about trends, not hierarchies.

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