Every successful business was once an underdog fighting against giants in the industry. However, they managed to turn the table around to become the giants that other underdogs have to face off against. This isn’t personal, it’s business and in business, there’s a battle line drawn between startups who are the underdogs and established companies. At first, it may look as if the underdogs do not stand a chance against the competition. But if there’s one thing we’ve learned from history, it’s the fact that underdogs are not completely helpless. In fact, there is an advantage to being the underdog. 

The bigger they are, the slower they move

Blockbuster is a well-known name in the movie industry. It was the biggest movie rental company in the ’90s and early 2000. Between 2004 and 2005, Blockbuster was at its peak. It had more than 9,000 stores and earned billions of dollars in revenue. At the time, the company was valued at about $8 billion dollars. But five years later, this movie rental giant filed for bankruptcy. So how did a company with more than 25,000 employees, 9,000 physical stores in different parts of the world, and 6,000 DVD public vending machines, go from earning a yearly revenue of $5.9 billion to being in a billion dollar debt? The short answer is Netflix. One disadvantage of giant companies is that they are less flexible and more risk averse compared to startups. So they tend to move slowly, a problem that startups rarely have. 

Netflix was founded in 1997 and at the time, they were no match for the movie rental giant, Blockbuster. Three years later (in 2000), Blockbuster turned down a deal to buy Netflix for $50 million dollars, a decision they will forever regret. Netflix came up with a revolutionary streaming service and became very popular while Blockbuster’s rental services dwindled. Although Blockbuster later realized that their era was slowly phasing out, it was too late for them to get into online streaming because they were already years behind. At this point, the giant began its slow and inevitable fall while the underdog (Netflix) went ahead to become one of the most successful startups in the industry. The story of Netflix’s rise to fame is a familiar one. Most companies we know today had to face off with more prominent companies at the early stages. To beat the competition, here are 3 things startup founders can learn from the history of giants vs underdogs. 

Have foresight

Startup founders must be able to predict what will be possible in the future. To develop such foresight, Startup founders must know that technology is moving at a rapid pace and what we can do now will be nothing compared to the possibilities that will exist in a few years' time. Reed Hastings knew that soon, the emerging broadband technology will phase out physical DVD rentals. So he prepared the groundwork that will enable him to take advantage of the future by building a streaming platform. 

Be flexible

Another advantage of Startups is that they can afford to be flexible without incurring many losses. In its early days, Netflix was renting out DVDs via mail. At the time, Netflix was still playing Blockbuster’s rules since they still had to ship our physical DVD. The idea was unique but wasn’t enough to topple Blockbuster, which had several stores, vending machines close to their customers, and more DVDs for customers to choose from. 

However, Netflix being the underdog was flexible and when the time was right, they could easily give up their DVD rental services and go all out for the streaming services. This move may have been a temporary setback but later proved to be a game changer. 

Other companies that prove that startups are indeed flexible are Amazon; they went from selling books online to selling just about anything, and Airbnb went from selling mattresses to a hospitality company worth billions of dollars. Founders can remain competitive by leveraging their flexibility while delivering value.

Learn from the competition

What are they not doing right?  Being new to the industry gives you the opportunity to study the competition and find out where they are getting it wrong or things that could be done better. This is a great opening for any startup and an easy way to poach the customer bases of the competition. One unsatisfied customer can give you great insights into what their pain points are and how you can tailor your unique selling proposition to win over customers. This could be by taking advantage of emerging technologies to deliver services for half the price, or even half the time.

Conclusion

Startup founders have a lot to learn if they want to become successful. It’s a long undulating path but easier to navigate if you have the right partner to guide you. At Epirus Ventures, we pride ourselves on being there for you and holding your hands as you steer your company to success. We’re a venture builder that connects you to resources and possibilities that you need to remain competitive and relevant.