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How To Compete With The Big Boys

Big businesses have some enormous advantages but they have weaknesses too.

How can you learn from recent disrupters and get a foothold?

I promise not to mention Uber. Well, maybe once – but I think I get away with it.

Firstly, it’s important to remember, that dispite the hype you hear about efficiency, most big businesses make money out of leveraging market power to be able to charge more than they should, and pay their staff and suppliers less than they should. Almost all their gains in the last 20 years have come at the expense of employees’ living standards, from screwing suppliers and from not paying for natural resources, or for damage to our world. Warren Buffet talks about investing in businesses that have “a moat”, in other words, market power to charge more than they would in a proper free market, not a pretend one. Plenty of SMEs try to adopt these same strategies and usually don’t grow, because they are not big. It’s not a level playing field, so go play by different rules.

If you look around at the young companies that have done well lately, they have not just innovated, which big companies find very difficult to do because they see the world as fixed in time and only win/lose. Smart disrupters have looked for ways to improve peoples lives. They are passionate about something and don’t just see consumers as a mathematical puzzle to “extract value” from for the same old products. Cool companies like AtlassianLivewire Markets and Amber Electric are looking to make things better.

None of this is really new. Look at what Aussie Home Loans did a long time ago now. Look for artificially high profits and go grab a share. We are all sick of intentionally confusing pricing structures, penalties for moving to another supplier, support that takes hours for anything other than sales, etc. Harness that annoyance by offering something better, simpler and transparent. For all Uber’s faults, taxies were dreadful. And once governments worked out how to raise revenue from Uber, the taxi industry was abandoned by them. I wonder if the same will happen to coal and gas. Maybe a solar levy is the best way to save the planet.

We all know that someone calling to tell us they can reduce our bill is most likely a sham, otherwise they wouldn’t bother calling you. So don’t be that company. Be transparent with your pricing, make it simple, provide great service, improve people’s lives, and the environment. Make it all simple. Employ great people and pay them well, but constantly strive for efficiency so that you can. Almost all the blogs on this site are about efficiency, not gaming the system, so you have come to the right place for inspiration.

Think about all the services you love using, I bet simplicity is the thing you value most. How can you create simple solutions that your clients, and your people, will love, that take advantage of all the many weaknesses in the behaviour of large corporates, or SMEs that try to copy them, and make a better world for all of us.

As my surfing coach told me “always spend 15 minutes on the beach watching the water to see what’s going on, see where the rips are before you paddle out”.

 

 

Photo by Andreas M on Unsplash

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