David vs Goliath

By: Angie

Joe Wilcox (who, quite honestly, I know nothing about) recently wrote a great article on Why Apple Succeeds, And Always Will. He pulls from Malcom Gladwell's New Yorker magazine article, "How David Beats Goliath" and recounts how Apple really is a David in a world of Goliaths (at least in the computer / tech industry), and that because they innovate rather than follow convention, Apple has been able to succeed (read: keep high profit margins).

Apple fanaticism aside, I think Joe is absolutely right. But that's not what this article is about. Rather, after I read Joe's article, I thought about how that very notion of David vs Goliath can (and probably should) apply to small business (and by some tangent, design). The key is in Gladwell's recounting of the Biblical story:

David’s victory over Goliath, in the Biblical account, is held to be an anomaly. It was not. Davids win all the time. The political scientist Ivan Arreguín-Toft recently looked at every war fought in the past two hundred years between strong and weak combatants. The Goliaths, he found, won in 71.5 per cent of the cases. That is a remarkable fact...

In the Biblical story of David and Goliath, David initially put on a coat of mail and a brass helmet and girded himself with a sword: he prepared to wage a conventional battle of swords against Goliath. But then he stopped...and picked up those five smooth stones. What happened, Arreguín-Toft wondered, when the underdogs likewise acknowledged their weakness and chose an unconventional strategy? He went back and re-analyzed his data. In those cases, David’s winning percentage went from 28.5 to 63.6. When underdogs choose not to play by Goliath’s rules, they win, Arreguín-Toft concluded, 'even when everything we think we know about power says they shouldn’t.'

As Joe put it (and applied it to Apple), Davids set their own rules rather than playing by the rules established by Goliaths. Small businesses that aim to succeed beyond just staying afloat (especially in this economy) are the Davids that set their own rules and innovate, rather than following the doctrine of business and marketing to the letter.

37signals – a small business by definition – is incredibly successful because they set their own rules and they innovated. They created first one product that was truly different, then followed up by other product. No, their products aren't new in concept, and yes, they created it first for themselves rather than for their market, but they did so without the "traditional" thinking that investors, tons of capital and a lot of production staff or salespeople were needed. And they were right. They wrote their own rules (and even wrote a book about it).

While I think that 37signals is on to something incredible and have a great business story, it's also not the norm. But the point here isn't that every small business need be like 37signals. That's just unrealistic. Instead, the point is that in order to thrive, a small business needs to innovate, set their own rules. It's taking what makes your business different (not necessarily better) and pushing it a few steps further. Not doing that doesn't mean you'll fail – there are plenty of other factors that could cause that to happen – it just means you're doing what most other small businesses are doing. While there's nothing inherently wrong with that, it's no recipe for grand success.