Wednesday, April 22, 2020

David vs. Goliath - Battling Giants - How Startups can Competing Against FAANG - Part 1 - Facebook FB, Amazon AMZN, Apple AAP, Netflix NFLX; and Alphabet/Google GOOG 

This is part one of a series we are doing on David vs. Goliath and battling giants. I will talk about how startups can compete against the FAANG companies and other major, well-funded, legacy competitors. The FAANG are Facebook FB, Amazon AMZN, Apple AAP, Netflix NFLX; and Alphabet/Google GOOG

The Original Story - David vs. Goliath 

Here are some excerpts from the Samuel 17, just in case you are unfamiliar with the bible story of David and Goliath.

A champion named Goliath, who was from Gath, came out of the Philistine camp. His height was six cubits and a span [about 9 feet 9 inches]. He had a bronze helmet on his head and wore a coat of scale armor of bronze weighing five thousand shekels [about 125 pounds or about 58 kilograms]; 6 on his legs he wore bronze greaves, and a bronze javelin was slung on his back. His spear shaft was like a weaver’s rod, and its iron point weighed six hundred shekels [about 15 pounds or about 6.9 kilograms].

He [David] took his staff in his hand, chose five smooth stones from the stream, put them in the pouch of his shepherd’s bag and, with his sling in his hand, approached the Philistine.

Meanwhile, the Philistine, with his shield bearer in front of him, kept coming closer to David. He looked David over and saw that he was little more than a boy, glowing with health and handsome, and he despised him.

As the Philistine moved closer to attack him, David ran quickly toward the battle line to meet him. Reaching into his bag and taking out a stone, he slung it and struck the Philistine on the forehead. The stone sank into his forehead, and he fell facedown on the ground.

So David triumphed over the Philistine with a sling and a stone; without a sword in his hand he struck down the Philistine and killed him.

David ran and stood over him. He took hold of the Philistine’s sword and drew it from the sheath. After he killed him, he cut off his head with the sword.

In Malcolm Gladwell's book David and Goliath, Gladwell points out that giants are not what we think they are. The same qualities that appear to give them strength are often the sources of great weakness. And the fact of being an underdog can change people in ways that we often fail to appreciate.

Battling Giants - Lesson 1 - Target a Specific Niche

David was properly equipped to battle Goliath. He wore no armor and used a deadly projectile weapon. He was fast and mobile. Goliath wore heavy armor and held a heavy weapon. He was slow and immobile. He was well equipped to go into a war leading a massive army. But he was not prepared to battle with a fast, single sharpshooter. Goliath didn't stand a chance.

Battling modern day giants with virtually unlimited resources requires you to focus on a specific niche. Otherwise, your marketing costs alone will likely bury before you get started.

Amazon launched in 1995 as a website that only sold books, founder Jeff Bezos had a vision for the company's explosive growth and eCommerce domination. He knew from the very beginning that he wanted Amazon to be "an everything store."

In 1997, Reed Hastings founded Netflix, a DVD-by-mail rental service at the time, in part after being frustrated with a $40 late fee from Blockbuster.

Mark Zuckerberg competed with MySpace by focusing on students at Harvard.

Notice a pattern? All of these FAANG companies started by attacking a very specific niche. Niches may include:
-Type of service or a subset of a service, e.g. Uber for eats
-Specific attribute of an existing business model, e.g. Free delivery 
-Geography, e.g. city or state
-Demographic, e.g. white females 25-35
-and more

Once you pick your specific niche, you can properly equip yourself for battle.

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Sources and Links,-concise-vision

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