What the Story of David and Goliath Taught Me About Competing With Massive Companies
With enough agility, innovation and user empathy, it is possible to disrupt and win an industry, even with a tiny fraction of the resources of competitors.
A giant of a man towers over a smaller, weaker opponent. It’s a dramatic mismatch, where the smaller opponent is facing a seemingly inevitable pummeling. This is the classic picture depicted in the tale of David versus Goliath, but as many are aware, this story ends with an unexpected victory. The smaller, feeble-looking opponent, David, uses his slingshot and clever strategy of keeping a distance to do the impossible and bring down his far stronger opponent.
Malcolm Gladwell popularized the idea that this story bears important lessons for other situations where the seemingly overmatched opponent can use his or her “disadvantage” to win. I was naturally skeptical, but when I founded my own company and achieved success amid several Goliaths, I became a believer.
Here are a few key lessons to help you do the same.
Don’t fight on Goliath’s terms
Had David engaged in close-range combat (presumably like every other failed challenger), we would never have heard of him; instead, he used a slingshot. In business terms, this means challenging both the giants’ products and their business models to gain an advantage. Rethinking industry “musts” is critical for paving the path to an unexpected victory.
Disrupting the market by challenging old norms has become the core element of the success story for industry giants like Airbnb and Uber. When the market-leading accommodation providing company owns no real estate and a wildly popular transportation business owns no vehicles, it’s clear that the rules of the game are more flexible than ever.
In the PR-software market, the prevailing model was that long-term contracts were the only sustainable way to do business, and pricing was to be negotiated, not presented transparently. When it came to the product itself, the database of journalists served as the heart of the product, with large teams attentively finding and correcting information.
We achieved growth by offering more cost-effective options with flexible contracts. While larger agencies and companies — which we also serve — will often opt for many seats and preferential pricing via a long-term plan, our flexibility and SaaS pricing model allow us to provide a largely unchallenged option to neglected small-mid agencies, SMBs and freelancers.
On the product side, we knew we couldn’t support a big team to check every contact manually, nor could we differentiate ourselves by building a database-first offering. Instead, we created a CRM-focused product, one that automated many of the most time-consuming processes for PR pros, from pitch tracking to building data-based reports; it allows us to provide a compelling offering while cutting costs.
David’s victory hinged on slinging carefully aimed rocks that struck Goliath from a distance. It was the result of a high level of skill aimed at precisely the right area, an almost perfect metaphor for product development when facing bigger competitors. Our team is about 20 people total while competitors have teams of hundreds of programmers working on their products. That disparity has turned into a significant advantage for us thanks to having a remarkably agile team that automates the right processes and develops features that will make a difference.
Paypal shot to prominence in large part due to its skilled team, which developed ways to automate significant aspects of payment processing and risk assessment — with a modest-sized human team to make sure the algorithms got it right. Peter Thiel and Elon Musk, who were part of the original PayPal crew and have gone on to other spectacular ventures, provide a perfect example of this. A core group of agile and competent experts that makes automation the bread and potatoes and human curation the gravy brings far more value than an army of workers who have no algorithms behind them.
While it might not seem like an underdog nowadays, it’s important to remember that Paypal came on to the scene as a no-name entity competing against industry titans like MasterCard and Visa. Presumably, Paypal was at a disadvantage, but the company embraced automation to overcome it and moved more quickly with less red tape and the often conservative thinking that sidelines bloated behemoths.
Double down on your expertise
David doubled down on his slingshot skills, but it’s another concept that describes one of the greatest advantages that small companies have, the Japanese phrase "genchi genbutsu," or “go and see for yourself.” The idea is that those who have first-hand experience are better equipped to make decisions or create.
My personal experience was running a PR agency, and that also happens to be one of our leading sales targets. That’s no coincidence. Unlike more prominent companies chock full of MBA and management generalists, I faced the challenges I’m solving and can understand my customers’ perspectives. No number of focus groups or surveys can make up for experience, and it’s guided our product from automated reports to sharing best pitch times and open rates of journalists across the system.
In business, David doesn’t need to slay Goliath. Most markets have plenty of room for multiple players, and it’s nearly impossible for one platform to be masterful in every way. Yet, embracing the David persona and structuring your solution on your terms, staying nimble and doubling down on your expertise can produce a tremendous advantage.
Entrepreneur Leadership Network Contributor