Structural advantages of startups
Startups must have some fundamental advantages over big companies—if they didn’t, startups simply wouldn’t exist.
It’s a tough time for startups out there. Funding markets are tight, and there’s a sense of conservatism/playing-it-safe that seems to be pervasive. This post from the archives has been especially top-of-mind for me recently, and I hope the long-time subscribers among you don’t mind a repost.
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Startups must have some fundamental advantages over big companies—if they didn’t, startups simply wouldn’t exist. If you’re explicit about identifying those advantages and using them, you’ll dramatically increase your chance at being successful.
But if you’re not taking advantage of them, you’re just a worse-funded, less-well-known, crappier version of a big company. Don’t be that.
Here are the structural advantages you have as a startup and how to use them:
You can move fast. As a startup, you can decide something in the morning and ship the feature in the afternoon. A variety of technical and cultural reasons prevent big companies from acting this way. Big companies basically have to move slowly. Small companies don’t.
If you’re not taking advantage of this velocity, you’re missing out on one of your biggest advantages. Act decisively and get your stuff out into the world ASAP.
You can offer white-glove service. At a startup, the CEO can talk to every customer. A big company can’t do this. But you can, and that’s powerful—you’re able to clearly signal to your customers that they’re important to you. Use your size as a strength, not a weakness.
As a customer, would you rather be the most important account for Small Company X, where you can literally email the CEO when something goes wrong, or customer 196237 at BigCo where it’ll be impossible to ever talk to a human?
It’s not always a slam dunk, but your best-fit early adopters will be excited to take a chance on you, knowing that you care more, and that you’ll deliver the personalized attention that a big company cannot.
(I still literally manually email every new customer at Pilot, personally welcoming them, for exactly this reason.)
You can hire truly exceptional people. If you have an inspiring narrative for your company, and if you actually empower your team, you can hire really talented people.
The fact that you’re small but high potential is what makes you exciting—your team will be able to have outsize impact and influence and will be able to dramatically move the needle at your startup.
Make that clear to them. Yes, they could be engineer number 25,000 at Google, but they’ll never move the market cap there. But at your startup, they absolutely will.
Of course, it’s on you to actually set them up for success. Once you have them on board, provide them with large areas of ownership and make sure the work really matters.
When combined, these three advantages can be quite powerful—but you actually have to use them.