Business Growth Strategies that Win Against Top Companies

June 22, 2010

I came across an article this week in the McKinsey Quarterly titled “When Companies Underestimate Low Cost Rivals”. The article discusses how market leaders end up losing marketshare to smaller companies. I thought this might be of interest to founders and or CEOs of early stage and expansion stage software companies looking for business growth strategies.

The article discusses several strategies that low cost rivals have successfully used to usurp the big guys. Strategies like:

  • Competing in the undeveloped segments (or fringe) of the incumbent’s market while they build up capability
  • Filling resource and capability gaps that the established players are ignoring
  • And my favorite — The role of second order effects where a firm competing at the low end enhances their products and services to move up in the market space while maintaining a low cost base

As a an expansion stage focused Venture Capital firm that provides expansion capital to software companies looking for investors, we are always looking to help companies and their management teams in large markets competing against established players.

Companies which deploy and execute strategies like the ones listed above — with a low cost model with a capital efficient distribution model — are often the companies that win big and succeed with a company exit strategy that delivers above-average returns for the founders, CEOs and management teams.

Enjoy the article. Maybe it will give you some ideas on how to beat the big guys!

All the best!


Venture Partner

<strong>George Roberts</strong> is a Venture Partner at OpenView. He enjoys partnering with companies and helping them achieve their goals through strategy, focus and operational execution. From 1990 to 2003, George spent 13 years at Oracle Corporation, most recently having served as Executive Vice President of North American Sales. While at Oracle, George was responsible for over $1 billion in revenue and more than 2,000 employees, reporting directly to the company’s CEO and Chairman, Larry Ellison.