5 Ways to Compete With [Big] Incumbents
Steven Sinofsky
2272

Great post, Steven. Here a couple of additional thoughts that might be helpful given I have competed as a startup against behemoths for the last 20 years. Sigh!

#1: “EA: wrap-and-roll trick”

Incumbents don’t give up easily — especially if you nibble away at their marquee accounts that both of you covet. They have MSA/EA “trump card” — that you don’t have.

I distinctly remember calling a CIO of a F250, after my sales rep (actually a pro) had assured me the “PO will be fax’d” and it was a done deal sitting on the CIO desk to be signed. Circa in 2006. That “sure-shot” pipeline 90% probability deal went from “slam dunk to slam door”!

I do these courtesy call for deals I “lose” to find out what we could have done better to win the deal, etc. He said, <insert large German ERP Co.,; large Redwood Shores giant, etc> had taken him out to a ballgame that Friday evening and told him his team was perhaps going another direction. If he were to sign their currently impending EA, they would just throw our “equivalent checkbox functionality” in for free with additional services to make up the difference in feature-set. He admitted that he was taking a bigger risk, going against his team’s recommendation, but hey how could I go wrong being in a box seat. Right?

That’s hard to compete for any upstart when you get hit below the belt like that. And it happens all the time. No matter the depth of your product. Their PPT will always prettier than your FFB.

#2: Getting “Shopped” and the going out of business FUD, when “SAP” is tattoo’d on their business card.

The powerful incumbents always throw a venture-backed company as a risky bet. Yes, we usually are, but most startups are focused on solving one problem deeply and richly. We get up (in the am) and go to sleep (in the am) thinking about all aspects of that problem and perhaps an elegant solution to it. When you already have “Cisco Certified” “Tableau” or “Oracle DB” specialist tattoo’d to your resume, it’s hard to get them to reprint that easily. Your best feature and price will also get “shopped” to the imcumbent — so you have to be “architecturally orthogonal” to them so you can build your moat to say they just can’t do it. Forcing them to a Pilot/POC helps, but it draws your overall sales cycle as well. It should the last resort, not the first one.

Yes, agree, it is very aspirational to have your company name next to their name.

hey, I do love a good fight. Especially, punching above one’s weight. I guess, some of these are enterprise systems de rigueur — but someone’s gonna keep going after ‘em.

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