As a region largely defined by bureaucratic institutions, Washington may seem an unlikely breeding ground for start-ups to survive and thrive in the shadow of much larger competitors. However, there is an exploding ecosystem of companies that have emerged victorious, and a number of others that are well on their way.
After all, the ingredients required for success are present throughout the region. A diverse pool of highly talented employees? Check. Capital to start and grow a business? Check.
The same is true in other parts of the country, too. Often, the only thing missing is a rallying cry to bring these assets together and take on big-business Goliaths. If you’re one of the brave entrepreneurs opting for the challenge, here are some tips to help you take on and take down your larger and more established competitors.
1. Hammer out a battle plan. Be crystal clear about the problem you are trying to solve and — equally importantly — about what a successful outcome looks like. Ambiguity can crush a new company.
2. Decide whether the battle is worth fighting. Taking on a large competitor on the shallow premise of doing something marginally better or for a slightly lower price will rarely work. You need to be providing your customers with a radically better solution. Shoot for the moon.
3. Know who you are fighting for. Defeating Goliath should be a byproduct of trying to help the people he (your competitor, in this case) is oppressing, not the goal in and of itself. Keep your focus on the constituents you are trying to help save money, live better or be happier. D.C.-based EverFi, for instance, set out to fight inadequacies in education, helping millions of students since 2008. Maryland-based WeddingWire successfully jumped into the $70 billion wedding market by focusing first and foremost on the needs of engaged couples.
4. Choose your weapon wisely. As a nine-foot giant heavily armored and equipped with a sword, spear and javelin, Goliath seemed an unlikely opponent for David to defeat. But by focusing on just one weapon with intense precision… well you know the story. Virginia-based Speek knew better than to fight a large competitor on too many fronts at once. So, the company is taking on behemoths like WebEx and GoToMeeting by providing a profoundly simple way to do one thing: make conference calls.
5. Embrace your nimbleness. While large competitors may seem intimidating because they are so well-established, this can play to your advantage. Whereas a start-up can test radical new business concepts and even pivot to a new business model overnight, large firms can often be slow to adapt. Case in point: While the publishing world has had a tough time keeping up with technology, D.C.-based web publisher Vox Media (The Verge, SB Nation) has grown into a $380 million dollar valuation by being nimble and evolving quickly.
6. It’s okay to fight a faceless enemy. There won’t always be a Microsoft for your Apple, and that’s okay. For District-based SocialRadar, a lack of effective communication was the enemy. So Blackboard co-founder Michael Chasen raised $12.75 million and set out to find a better way to find and communicate with people nearby.
7. You don’t always have to fight for the little guy. Your customer can take many forms. Optoro, also based in the nation’s capital, has raised $50 million to help some of the world’s largest retailers and manufacturers manage and sell returned inventory.
8. Battles don’t only take place around technology. While much attention is paid to the headline-grabbing world of technology, there are many other industries in desperate need of disruption. Founded in D.C., Sweetgreen set out to provide a healthier option for eating organic and locally sourced ingredients. The salad chain now operates 29 locations on the east coast, with imminent plans to move West.
9. Learn to take a punch. Business is rarely a nice clean line up and to the right. You will surely suffer attacks from your competitors. But you can recover. Take LivingSocial, which has been on a wild ride since launching seven years ago but maintains a workforce and customer base that the new CEO plans to utilize for a total rebuild.
10. Don’t throw in the towel too early. Don’t get caught up in the hype surrounding overnight success stories — these are outliers. Most successful businesses take time to build. Blackboard is a wonderful D.C. start-up success story, selling for $1.64 billion in 2011. But that only happened after 15 years of hard work.
Bottom line: Keep your eyes open. Opportunities abound to disrupt the status quo, and with the new year comes a fresh opportunity to take on the Goliaths. In the wise words of President Reagan, “When you can’t make them see the light, make them feel the heat.”
Joel Holland is the founder and chief executive of Reston, Va.-based VideoBlocks, a subscription-based provider of stock video and one of the fastest-growing tech start-ups in the Washington region, according to Deloitte Technology Fast 500.
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