How can I build a successful business from scratch when there are giant businesses existing in my industry? How can I compete favorably with the giants of industry when I have limited budget? If you desire answers to the two questions asked above, please read on.
“You don’t have to be the biggest to beat the biggest.” – Henry Ross Perot
The story of David and Goliath is one of the biblical stories I love so much since the days of my childhood. For those of you who may not be familiar with the story, it is simply a story of how a little shepherd boy defeated a famous fully armed giant warrior.
An inspiring story of how a boy rose from nothingness to become one of the greatest king and warrior. Though I am not a religious fanatic, I often use this story as a source of inspiration whenever I am faced with a giant obstacle.
“It’s alright to be Goliath but always act like David.” – Philip Knight
Now how does this story apply to you and the business world? As an entrepreneur, I believe you know that the business world is full of giant companies with billions of dollars to spend on advertising. These giants have all it takes to crush any small business that crosses their path.
“In business, the competition will bite you if you keep running. If you stand still, they will swallow you.” – Victor Kim
But over time, I have seen few small cap companies with limited budget outperform and overtook these giant competitors. So how were these small cap companies with limited budget able to overcome the giant competitors? How were companies like Microsoft, AOL, Dell, Amazon, Google and Yahoo able to outperform established billion dollar companies like Barnes and Noble, IBM, J.C Penny, Wal-Mart and so on? This article is going to provide you with the answer.
After digging deep, I finally found the answer to these questions in the story of David and Goliath. I also found out that the lesson of this story is very applicable to the business world. Asking the questions above is just like asking “how did David defeat Goliath?
In this article, I am going to reveal to you how to overcome your giant competitors with your limited budget using the story of David and Goliath as a source of reference. All you need is to keep an open mind and be willing to apply the principles. Before I proceed, I will like you to assume your business as a David and your competitors as Goliath.
“Therefore I say: know the enemy and know yourself; in a hundred battles, you will never be defeated. When you are ignorant of your enemy but you know yourself; your chances of winning or losing is equal. If you are ignorant of both your enemy and yourself, you are sure of defeat in every battle.” – Sun Tzu
David Vs Goliath: How to Overcome your Giant Competitors with Limited Budget
“Inside each of us is a David and a Goliath.” – Rich Dad
1. The Power of a Niche
In the battle against the Philistine army, David was able to spot a niche; a niche nobody wanted to venture into. All Israelite soldiers were waiting for a confrontation with the Philistine army but nobody wanted to face Goliath. David was able to spot the niche that nobody wanted to fight Goliath. So Instead of focusing on the army of the enemies, he focused on Goliath. Goliath was his niche to victory.
“Concentrate your energy, your thoughts and your capital.” – Andrew Carnegie
Also in the business world, big companies with billions of dollars to spend on advertising are often after large mass markets, thereby paying less attention to the smaller niches. Now for you with limited budget, you can match these bigger competitors by focusing your efforts on the niches overlooked by the giants.
Sometimes, big companies feel too big to serve these smaller niches. All you have to do is take advantage of their ego, serve these small niches with the little budget you have and see your business sales skyrocket. I think you will understand more with these illustrations:
- How was Richard Branson’s Virgin Atlantic able to break through the monopoly of British Airways? The answer is; Virgin Atlantic focused on providing first class services at cheaper rate to an ignored niche, “Business class and Students.“
- How was Henry Ford able to become one of the richest men in his time? Henry Ford became a billionaire in his lifetime because he focused on providing quality automobile at an affordable rate to an overlooked niche, “the masses or low income earners.”
All these illustration brings me to my lesson one which states that: There is often an abandoned or overlooked niche in every industry. To overcome your competitors, all you have to do is find this niche and serve it. Leave mass marketing to the giants; you can achieve more result using targeted marketing as a strategy.
2. The Power of Faith
Before confronting Goliath, David had faith that Goliath could be defeated. Now as human beings, we are bound to have doubts or fear. David may have experienced a little fear but the difference was that; his faith was stronger than his fear. Faith is simply the ability to act despite tremendous doubt.
“Fear is faith that it won’t work.” – Mary Kay Ash
As an entrepreneur, you must never see your competitors as infallible. You must see a possibility in your mission to outperform your competitors. Just as Adidas slogan says: “Impossible is nothing.” If you execute your business plan and implement your competitive strategy with this mindset, success will be yours. One thing I want you to know about faith is this; faith attracts supernatural assistance.
“Without faith, it is impossible to please God. With faith, you can move mountains.” – The Holy Bible
3. The Power of Self Belief
“Some people intertwine self belief and faith but I stand to say they are not the same. Faith is not self belief. While faith says it can be done, self belief says ‘I can do it.’ While faith says there is possibility, Self belief says ‘I am the possibility.’ Faith without self belief is vain.” – Ajaero Tony Martins
If you analyze the biblical story of David and Goliath; you will observe that Israelites had faith that Goliath will someday be defeated but none had self belief. The soldiers said in their hearts “one day, Goliath will be defeated” but they avoided the word “I can kill Goliath.” David not only had faith that Goliath can be defeated; he also had the self belief that he was the one to do it.
“One important key to success is self confidence. An important key to self confidence is preparation.” – Arthur Ashe
Many entrepreneurs lack self belief; many entrepreneurs are very good at spotting opportunities disguised as problems and they know a solution can be found but they don’t see themselves as being the one to provide the required solution.
Many entrepreneurs don’t believe in their God given abilities. Some can’t picture their business competing favorably with big companies. As an entrepreneur, you must have faith that your competitor can be defeated and you must believe your business can do it.
“The biggest challenge you have is to challenge your own self doubt and your laziness. It is your self doubt and your laziness that defines and limit who you are.” – Rich Dad
Now how can you develop self belief? The first step is to access your strengths and weaknesses. I added weakness here because a chain is only as strong as its weakest link. You must also access that of your competitor’s. Though Goliath was fully armed and heavily armored, he was defeated because his opponent (David) spotted and exploited his weakness. You can outperform your competitors if you can spot their weakness and exploit it.
Another way to strengthen your self belief is by drawing courage and inspiration from your past achievements and track record. David drew courage from his past achievement of killing a bear and a lion. He believed Goliath will also end up like the lion and bear. You can also boost your self belief by discovering your Competitive Advantage in business.
“You are nuts and you should be proud of it. Stick with what you believe in.” – Trip Hawkins
4. The Power of Persuasion
Though David had the faith, self belief and a good track record, he would never have confronted Goliath if he had not been able to convince and sell himself to King Saul.
“The ability to sell is the number one skill in business. If you cannot sell, don’t bother thinking about becoming a business owner.” – Rich Dad
This same scene is also applicable to the business world. I have seen entrepreneurs with strong business plans but they seem not to be making headway because they lack the ability to convince investors to invest in their idea. I have seen businesses with great products and services remain stagnant because they cannot sell. You may have a strong competitive advantage, a great product or service and a proven track record but if you cannot sell yourself, you will remain where you are.
“Anything that won’t sell, I don’t want to invent. Its sale is proof of utility and utility is success.” – Thomas Edison
Sometimes I wonder where Bill Gates would have been, if he hadn’t been able to sell his proposal to IBM. I wonder if there would have been a General Electric, if Thomas Edison hadn’t been able to sell himself to investors and I wonder if Aliko Dangote; the richest black man in the world would have been able to raise a billion dollars for his Obajana Cement factory, if he lacked the ability to sell.
5. The Power of Leverage
“Give me a lever and a place to stand and I will move the earth.” – Archimedes
Leverage is one of the most powerful words in the world of business and investing. Leverage is simply the ability to do more with less. Leverage is simply asking; how can I position my business to compete favorably with less resources?
“Leverage is the reason some people become rich and others do not become rich.” – Rich Dad
David acknowledged that Goliath was taller and heavily built than he was, so he asked the question; “how can I defeat Goliath without engaging him in a hand to hand combat? That answer came in the form of leverage. That leverage was a “sling.”
“The most important word in the world of money is cash flow. The second most important word is leverage.” – Rich Dad
A simple truth is this; leverage is everywhere. Leverage can be in the form of financial leverage, brand leverage, personality leverage and intellectual leverage. In fact, there are many ways to surpass your competitors using leverage as a tool.
I will not go into the details of leverage here because I previously wrote an article titled “The Power of Leverage,” so if you are interested, you can read it later. A last note I want to drop about leverage is this; leverage is a double edged sword, it can make or break your business.
“Financial leverage is the advantage the rich have over the poor and middle class.” – Rich Dad
6. The Power of Speed
“Your greatest and most powerful business survival strategy is going to be the speed at which you handle the speed of change. That speed of change is trend.” – Ajaero Tony Martins
When it comes to building a business, I have seen what the power of speed can do. But before I proceed, let me take you back to the story of David and Goliath. Goliath was armed with a shield, spear and a sword but David had only a sling and a stone. Now what was the difference?
“The speed of the leader determines the speed of the gang.” – Mary Kay Ash
The weapons of both David and Goliath had the potential to kill but the difference emerged in their speed. Though David’s weapon was cheaper, lighter and smaller, it had the ability to reach its target faster than that of Goliath. The sling and stone had the power of speed.
“A company’s ability to respond to an unplanned event, good or bad is a prime indicator of its ability to compete.” – Bill Gates
Is the power of speed still applicable in our time? My answer is a resounding yes. When the dot com era began, I saw the speed at which new small cap companies like Dell, Google, Yahoo, Microsoft, Amazon and Google embraced the dot com trend. While older companies were contemplating joining the web trend, smaller companies jumped in. These smaller companies later surpassed their heavily capitalized older counterparts. That’s the power of speed.
“How fast a company can respond in an emergency is a measure of its corporate reflexes.” – Bill Gates
“The most important ‘speed’ issue is often not technical but cultural. It’s convincing everyone that the company’s survival depends on everyone moving as fast as possible.” – Bill Gates
I hope you know that the speed at which you make life changing decisions determines how far and how fast you will go in life. My question to you now is; how fast is your marketing weapon? How fast is your business idea? How fast is your plan and how fast is your strategy?
“There are fast ideas and slow ideas, just as there are fast trains and slow trains. When it comes to money, most people are on the slow train looking out the window watching the fast train pass them by. If you want to become rich quickly, your plan must include fast ideas.” – Rich Dad
The internet came with a new kind of speed and small cap companies speedily took advantage of this new speed. By taking advantage of this new speed, these new small cap companies were able to reach the customers faster and at lesser costs than their giant counterparts.
Companies like Dell, EBay and Amazon sold more and delivered faster via web stores. They speedily handled customer’s complaints and orders via emails. This new speed gave small cap companies like Amazon, Dell and EBay a new kind of leverage and power; the power to do more with less. This new power made the small cap companies surpass and eventually become more valuable than their giant competitors.
“Business is going to change in the next ten years than it has in the last fifty years.” – Bill Gates
The business world is changing so rapidly. If you are not swift to take advantage of the latest innovation or trend, your business will become obsolete or out of date. Once again I ask; how fast is your plan and strategy? How fast can you handle the speed of change called trend? The answer to these questions may be your competitive advantage.
“In three years, every product my company makes will be obsolete. The only question is whether we will make them obsolete or somebody else will.” – Bill Gates
7. The Power of Flexibility
The problem most entrepreneurs have is the problem of “mental rigidity.” Entrepreneurs with mental rigidity may have good plans but the problem is; they think their plan is the best plan. When presented with a new and better plan, these entrepreneurs will close their mind saying; my plan is the best.
“Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while.” – Jack Welch
Lack of flexibility made Henry Ford lose the leadership position of Ford Motor Company to Alfred Sloan’s led General Motors. Henry Ford insisted on mass producing cars with a single color; black while General Motors experimented with different colors on their cars.
“To defeat the enemy, you must be as flexible as water. Water has the ability to quickly take the shape of any container it finds itself.” – Chinese proverb
In most of my articles, you will observe I always recommend you keep an open mind. Instead of just reading my article title and drawing a conclusion, I always recommend you keep an open mind, read the article carefully and reflect on the lessons. Your criticism can come after this.
“Cynics and fools are twins on the opposite sides of reality and possibility. Fools will believe any far fetched scheme and a cynic will criticize anything outside their reality. A cynic’s reality does not allow anything new in and a fool’s reality does not have the ability to keep foolish ideas out.” – Rich Dad
My reason for recommending you keep an open mind is because there are two sides to a coin. In every situation, opinion, fact, problem or opportunity; there are always two sides. The problem is that most people only see one side of the coin. Seeing two sides requires you keep an open mind.
Let’s go back to our story. David has never used a sword or armor before; all he could use was the sling. Though David was not used to wearing armor, he was willing to try it when King Saul suggested it to him. David ended up not using Saul’s sword and armor but the point remains, he understood the power of flexibility.
Flexibility as a competitive strategy can be a key to overcoming your giant competitors. As an entrepreneur, you must constantly be on edge. You must always be open to new ideas and willing to expand your perspective.
8. The Power of Strategy
In any game, strategy is a very important word; and entrepreneurship is a game. In business, it’s often said that the company with a smarter strategy will always emerge the winner. Sometimes, we intertwine the word “strategy” with “tactics” but they are not the same.
According to Oxford dictionary; a strategy is a plan developed to achieve a particular purpose. It is also said to be the process of planning something or putting a plan into operation in a skillful way. Tactics on the other hand is a particular method used to achieve something.
“My most important word in business is ‘Strategy’ and the reason is this: The speed at which your business grows is directly proportional to the overall strategy deployed on that business and the team behind the creation of that strategy.”- Ajaero Tony Martins
Now in the game of trying to overcome your competitors, you must develop a smart strategy that will help you achieve your aim. The aim of a business strategy is to concentrate your business interest to the overall resource exploitation with the ultimate goal of increasing sales, overcoming competition and dominating the niche.
Taking a cue from our biblical story, you will note that David was strategic in his approach towards Goliath. His strategy was to subdue Goliath with minimal effort; and to ensure the successful implementation of this strategy, David employed the following tactics:
- He picked five stones instead of one, just in case the first stone didn’t make the hit.
- He avoided engaging Goliath in a hand to hand combat because he knew he couldn’t match Goliath strength for strength
- He exploited Goliath’s ego and over confidence
- He aimed at achieving his goal with the first shot
- He took Goliath by surprise and caught him off guard
“To win one hundred battles in one hundred victories is not the ACME of skills. To subdue the enemy without fighting is the ACME of skill.” – Sun Tzu
These were the five tactics David employed in his fight against Goliath and it worked. Before going up against your competitors, consider putting together a strategy which should also include contingency plans just in case things don’t go your way.
“The best thing to invest in your business is your time. To schedule, plan and use time effectively, know your turf and know your objectives. Assess the obstacles and opportunities, then devise your strategies.” – The Mafia Manager
In conclusion, I want you to know that success in business does not come merely by reading but by implementing what you’ve read. Just as a popular saying goes; “the taste of a pudding is in its eating.” Overcoming your giant competitors will not come by planning alone but by strategically executing the plan. As a final note, I leave you with this quote.
“When somebody challenges you, fight back. Be brutal, be tough.” – Donald Trump