If you are a startup, big companies can be scary. They have power and could invade your turf at any moment. They could copy your product leveraging their many more resources and distribution advantage. For example, this is what happened with Instagram Stories with Snapchat or Twitter Spaces with Clubhouse.

Big companies have money and power. But what is often said to contrast this is that startups are fast and nimble. They can outmaneuver the giant corporation and win out of sheer speed and focus. The startup myth is that they are to big companies like David is to Goliath. Is that really the case?

Big companies have multiple advantages. The first one is money. They have a longer runway than any startup. Not needing to raise to stay alive, they can funnel the revenue from another product to fuel the growth of a new one. They can operate at cost or at a loss to acquire users and market share. They can use their existing relationships and distribution channels to sell the new product. Or they can bundle the new product with another more popular and already existing (see Microsoft Teams and Slack). The other big advantage is that they have access to talent. They can afford to pay high salaries, concrete immediate upsides compared to the stock option programs of startups. They can attract people with perks: free lunches, modern equipment, and discretionary budgets.

But being big is not only positive. I like to compare big companies as big animals. Like elephants or whales. Big organisms have multiple downsides given their size.

There are some problems that go with size:

This is a fantastic opportunity for startups. By realizing the conundrum big companies are in they can outmaneuver them. Focusing on the weaknesses of big companies they can build a strategy to succeed.

Daring more, shipping more, surprising the market. Startups can be smart and aim for the right objective. A bit like David, taking a step back and understand its enemy’s weaknesses, throwing the stone directly in the eye of the cyclops.