7 Things Startups can do that Big Businesses Struggle to get right

by Chandoo on August 13, 2010 · 4 comments

in How to Start, Startup Struggles, Uncategorized

One of the big fears when you want to start a company is that, “What if Google / Microsoft / < your favorite big company > implements same idea, but better?”

Well, the sad news is that there is nothing that you can do about company X implementing your idea better.

But there is good news. You, as a start-up can do things differently that a big business will really struggle to do.

Growing a Small Business & Differentiating from Big Businesses

[original image from Robert S Donovan]

In my experience these things are,

1. You can Email immediately:

Here is what I do. I get about 30-50 emails out of which at least 10 are from people who are either customers or members of my community. I generally star such mails (in gmail, press s while reading the mail to star it). Once every 1-2 days I view all the starred mails and reply to them with information they asked, thank for the mail, provide solution to their problems. And if the email is simple question or thank you note, I usually reply on same day, sometimes in the same minute.

While my system is not fool proof, and often I forget to email back, I try to send replies to almost everyone emailing me.

You too can do the same, and create a stunning impression to your customers.

2. List your personal phone number on your website:

Here is one thing most of us hate in big businesses. If you have trouble using their product, you have to call a helpline (typical 1800-CALL-NOW) and wait impatiently for someone as clueless as you to pick up the phone and express the problem only to get a half-witted response.

Well, as a small business owner, you are at advantage. You can just list your own personal number on your site, product brochures or sales receipts so that customers can call you and get a quick fix instead of waiting in agony. And best of all, if my experience is anything to go by you hardly get any calls.

3. Choose whom you want to sell to:

Big businesses have no control over who their customers are. Any one can buy Windows, AdWords or iPod and bitch about them openly and publicly or create a huge support PITA. As a small business owner, you are at an advantage here.

I have personally refused clients that I think are difficult to work with or refunded full money to customers who bought my products but not satisfied with what they got.

4. Service instead of sell:

Traditional model of business is that you should focus on selling and give only a reasonable amount of service. The logic behind this is simple. Sales is what gets you money, service costs you.

But this logic fails when you are running a small business. I try to keep my sales efforts as minimum as possible and instead focus on service. This includes,

  • Making minor changes to my products for customers for free of cost
  • Giving free upgrades to everyone who bought the product
  • Allowing customers / prospects to ask questions directly by commenting on relevant posts (and then replying to them)

5. Collaborate instead of Compete:

We all knew that Apple has a killer phone, Microsoft has a killer Office application set, Google has a killer search engine. But instead of collaborating, they choose to compete, and now we have,

  • A killer phone and almost mediocre office app from Apple
  • A killer office app, ok search and mediocre phones from MS
  • A killer search, ok phone OS and mediocre online office apps from Google

See, it is in the blood of big businesses to compete. But small businesses can be very different. They can collaborate.

For eg. many of my customers, students and web-site visitors asked me to do an online course on financial modeling. Now, I am not an expert in that area, but I can kick ass in Excel. So I collaborate with another small company, called Pristine and we are doing a course on Financial Modeling using Excel. It is a win-win for everyone.

6. Keeping things really simple

Decision making is a pain in many big businesses. Front line employees are often not empowered to do anything more than what their job description says. This is not so in a small biz. You can choose to keep almost eevery aspect of your business really simple. For eg. I choose to keep refunds dead simple. Anyone not liking my products have to just ask and they will get a refund. Some ideas for you,

  • Allow customers to get in touch with you thru email or phone. Dont list generic email ids like sales@companyname.com instead give id like chandoo.d @ gmail.com so customers know that there is a real human being at the other end.
  • Keep sales process really simple: Deliver goods almost immediately or at least do it in the promised time lines. Don’t try to oversell or hard sell.
  • Do surveys when working on new products: do a simple survey like “are you interested in buying x?” and use the feedback to decide whether or not to work on a product.
  • Accept mistakes and move on: when you mess up, just say so and then move on. Life is too busy to worry over split milk.

[related: simplicity and other values for a startup]

7. Doing the right thing instead of doing the profitable thing

A big business must always have profit as its goal, even when they say “don’t be evil”. But as a small biz owner, you can do what is right, even if it costs you more. Most of the time, the extra cost is always extra time you work on x. So it doesn’t effect cash-flow as such.

For eg.

  • I could improve my revenues by 25% just by placing one more ad on my website’s article pages. But I dont do that because it would hamper my visitor’s reading experience.
  • Few of my students couldn’t finish my online course in time and asked me if they can stay back few more weeks to finish the course. I gave them an option to join 2nd batch at 75% discount. That is right 75%!!! and many of them joined batch 2. Now, I could very well have asked to pay them full fee or 50%, but I choose to cover only half of my costs because that is right thing to do.

What do you do to distinguish your small business from others?

Related info: That is a not a competitive advantage and Real unfair advantages both from excellent A Smart Bear blog.

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