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How to Deal When a Tech Giant Tries to Take Over Your Sandbox

In this age of looming tech giants and super brands, your young-gun startup may seem an appealing morsel. Here's how to resist the giants and still keep your investors happy.
How to Deal When a Tech Giant Tries to Take Over Your Sandbox
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When you first set out on your startup journey, it may seem that you’ve got the whole world to yourself. You’ve carved out a space where you can play, innovate and grow without the immediate pressure of competition.

Related: 3 Ways Your Startup Marketing Can Outmaneuver the Big-Budget Competition

But all that apparent freedom has a caveat: We’ve entered an age of looming tech giants and super brands that are seeking to acquire young-gun startups and take over the new arenas they’ve created.

Consider the example of the social giant, Facebook: In late 2016, Facebook unveiled its plans for a new professional communication tool, Workplace. This new feature functions much like its smaller-name counterpart, Slack, pairing Slack's collaboration and chat capabilities with Facebook’s trademark ease of use.

The social media platform is also rumored to be encroaching on the travel industry, with online booking for transportation and hotels, indicating it may be trailing closely behind Google's travel-booking features as well as Expedia.

Sure, Facebook is just one example, but situations like these are far from uncommon. Brands with big names will catch on to grassroots ideas and either create their own versions or offer these startups a buyout. In fact, the number of mergers and acquisitions today is twice what it was in the '90s, and many startups are now founded with the express goal of being bought by a giant company.

But maybe that's not your style. Maybe you want to become a great startup in your own right and step outside the tech giants' shadows. That's okay. If that's the case, you’ll need to show your customers exactly what they would be missing without you and ensure that they're still on your side, even in the face of those mammoth-like hunters out there. Here are three ways to do just that:

Related: 10 Ways Competition Can Improve Your Business

1. Stay flexible -- rethink your scene.

One old-school strategy for rising above the competition is to focus on a specific niche. Startups usually have their specific audience in mind, but if a tech giant is creeping into your scene, simply redefine your space. For example, a pet supplies business facing fierce competition from a global brand might narrow its expertise to provide unrivaled high-end cat beds, securing itself a much smaller but less fickle group of customers.

Niche businesses' time to shine is now, and they're performing well in a "David vs. Goliath" business climate. According to a 2015 McKinsey Global Institute report, businesses in emerging and tech markets have singlehandedly slowed the unprecedented corporate profit growth.

Consider Bevel, a personal care company up against household names such as Gillette. By providing a simple, specialized service within the shaving industry -- direct-to-consumer shaving supplies designed for African-American men -- Bevel has garnered an audience in men with coarse and curly hair.

2. Remain close to your customers.

Giant brands have giant budgets, but they don’t necessarily have the relationship your startup has developed with its target audience. Use that closeness to your advantage. Get into your customer's mind in a way giants can’t by using what you know to provide the perfect price point. Create options that account for small budgets, special occasion purchases, and luxury allowances.

According to research from thinkJar, a customer-strategy consultancy and think tank, 86 percent of consumers surveyed said they were willing to pay more for an upgraded experience. So, don’t lose out on that potential revenue -- create pricing tiers that make your customers feel that they’ve found their perfect match.

3. Remember, great service isn't enough anymore.

Stellar service is often a company's backbone. It's the reason people still love going to their local grocer or are happy to ditch Starbucks for their nearest independent coffee shop. In fact, according to an American Express survey, nearly 80 percent of consumers said they'd deserted a transaction because of a poor service experience.

But while great service isn't everywhere you turn, it's not difficult to find, either. You’ll need something more to keep the startup spirit working for you. One route is to listen carefully to customers’ wants and needs and adapt your product to perfectly fit their lifestyle. Rich Bergsund, CEO of Wine.com, did this when he introduced customer-chosen delivery hours to make it easier for customers to sign for and receive their purchases.

Related: 5 Ways Startups Can Beat Big Companies

Even when you're up against the toughest competition, you don't have to succumb to the buyout trend. You founded your organization for a reason: You're bringing your audience value. Looming business giants might seem intimidating, but by harnessing your niche scene's advantages, you can make your company look big businesses in the face and resist that takeover.

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