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Some realities manifest at different scales. Once you're in the largest tier, the "where is the money" reality affects things. Large corporations are the large

by netcan 6y ago

Some realities manifest at different scales. Once you're in the largest tier, the "where is the money" reality affects things. Large corporations are the larger, wealthier segment. A big chunk of "startup business strategies" ignore this market. This makes a lot of sense for a startup. You don't really care what the bigger market is as a startup, you care what market is easier to access. Assuming the market is big (eg online payments), the size of the market isn't a limiting factor. That works in-context. I'f you're trying to build a startup, landing a multi-year contract with a big company is a bad angle for multiple reasons. Not always, but mostly in the generic case. Long sales cycles. Checklist feature demands. Custom features. Besides being hard for most founders, it pushes in the wrong directions. Meanwhile, who cares if you're addressing a $3bn market or a $800bn market. Both of those are big enough for a startup aiming for $8m in revenue. Your problem is sucking and failure, not pyrrhic victories. Also, if you are successful enough, small markets become big markets. When Google IPO-ed, they competed with yellow pages for mom-n-pop business & such. OTOH, most of the market is large companies, governments, etc. That's reality, and it means something. Now that VCs fund startups so generously, a common pattern is bootstrapping in a shallow pond... then jumping into the main pond once you have momentum. EG, Having a "developer cult" mentality, like stripe, at your base will serve you in the long term. Enterprise developers do have influence. It's never what makes a decision, but it can be a favourable wind.

hinkley 6y ago
If you are a startup, courting a large customer can compromise the integrity of your project. You have no leverage at all, which means the product will start to look like what they want it to be. And because you made a deal with them when you had no leverage, the terms will also be awful, and difficult to renegotiate. So you have to go try to increase margins off of smaller customers, all with a product that looks like what the person you aren't making money off of wanted it to look like. Hypothetically speaking, of course. Because I definitely for sure did not work for a place who tried to go big too soon and ended up with a modest exit.

by netcan 6y ago

hinkley 6y ago

If you are a startup, courting a large customer can compromise the integrity of your project. You have no leverage at all, which means the product will start to look like what they want it to be. And because you made a deal with them when you had no leverage, the terms will also be awful, and difficult to renegotiate. So you have to go try to increase margins off of smaller customers, all with a product that looks like what the person you aren't making money off of wanted it to look like. Hypothetically speaking, of course. Because I definitely for sure did not work for a place who tried to go big too soon and ended up with a modest exit.