How do Davids defeat the Goliaths?


Lawrence Levy in his new book To Pixar and Beyond – My Unlikely Journey with Steve Jobs to Make Entertainment History addresses a question that has long intrigued me: how do tiny startups defeat large, powerful ensconced companies?

I had long been fascinated by why Silicon Valley existed at all. My work with new businesses left me mystified as to why giant companies with enormous resources and seasoned management teams allowed tiny start-ups to eat into their markets. ….

The answer, I believed had to do with one thing: culture

Culture is the invisible force on which innovation depends.

While I totally agree with Levy, in fact one of my tenets is that “culture is the invisible hand of management” – in other words with a strong enough culture like Pixar’s, the company in effect becomes self-managing.

However, having been at a tiny startup that invented the electronic spreadsheet – VisiCalc. I think there are other reasons Davids defeat the Goliaths:

1. Focus – unlike very large companies like IBM, at Software Arts (inventors of VisiCalc) we were intensely focused on a single products, not a product line, subsidiaries, foreign holdings, internal politics, and all the other baggage that distracts big companies.
2. No fear of failure – would-be innovators at large companies are afraid to fail, they may get fired. So they are inhibited from trying anything too new and different from the status quo. Founders are fearless (or they too will fail).
3. No fear of cannibalization – large companies have existing products which they jealously guard. They live in fear of other products eating into their market share. The last thing they want to do is eat their own existing products with new ones.
3. No bureaucracy – bureaucracy is the thicket of company rules, regulations, practices and systems that grow as the company grows and encumber decision-making and slow down or kill any new efforts. Startups are too new to suffer from this problem.

4. Lack of market blindness – big companies just can’t see beyond their own success and products. Ken Olsen, founder and CEO of DEC, the pioneering minicomputer company, was infamous for saying “Why would anyone want a computer in their home?”

To Pixar and Beyond is not the story of a startup, nor does it have much about mentorship in it either. It’s really the story of a turnaround. But I still recommend it as a fascinating look at how tiny Pixar became a movie studio success, and an inside look at what it was like working with Steve Jobs to achieve that success.

Author: Mentorphile

Mentor, coach, and advisor to entrepreneurs, small businesses, and non-profit organizations. General manager with significant experience in both for-profit and non-profit organizations. Focus on media and information. On founding team of four venture-backed companies. Currently Chairman of Popsleuth, Inc., maker of the Endorfyn app for keeping fans updated on new stuff from their favorite artists.

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