Startups vs Big Companies as Vendors
If the challenge is to invent a new product line or to solve a problem not yet solved, the Startup will likely win. A small team of smart people completely focused is more likely to succeed than a large company with many competing interests.
1. Focus. Large companies have many different product lines, any one of which is likely to not have the full attention of top management and top talent. Though the innovation might be developed by a brilliant team, they have trouble competing for the resources, attention, and blessing of top management. Example: Google and Social.
2. Sustaining Growth is prioritized over New Ideas. Often, a large company’s objective is to simply grow their existing business. Most of the organization has learned how to build that product, deliver that service, and serve those customers, so most of the organization’s goal is simply to grow that existing business using their existing knowledge. Fully utilizing a new idea or innovation is unlikely, even if it has a place in the existing organization. Example: Xerox and the GUI.
3. Ignorance is Bliss. “It is difficult to get a man to understand something when his salary depends on his not understanding it.” – Upton Sinclair. Sometimes, a large market shift is about to happen. Yet, in large companies, resources are already dedicated to moving in a particular direction. To stay consistent, acknowledging and investing in an emerging market shift is something that the leadership and DNA of large companies will actively ignore, because it means acknowledging that their existing organization is likely going to die. Example: DEC and the PC.
What does this mean in the context of education? Large organizations tend to prefer stable sounding vendors, i.e ”Nobody ever got fired for choosing IBM.” Yet, this preference lacks a perspective. While choosing a gold standard, stable firm tends to work for established product lines and known problems, if what you are looking for is some kind of breakthrough innovation or out of the box thinking, choosing an underdog that’s focused is probably the winning bet. So, the risk averse thing to do, if given a choice of what mobile, social, or big data vendor, is to work with a new company. It is the old, big company that’s risky.