LIKE SMALL BUSINESS SURVIVING THE WORLD LARGEST COMPANIES
The creator of the IT startup Moderite OÜ talks about how he was not afraid to enter a saturated market. His advice to start-up businesses: fight for your place, a small company has every chance of success.
We translated the most interesting of the post on Medium.
1. Use the weight of the opponent against him
Large businesses need large resources to support infrastructure (salaries, office, etc.).
When what happens on the market that harms all companies in the industry, the “heavyweights” suffer millions of losses, and small businesses lose only hundreds of dollars.
Market Glut: Tips for IP.
My company does not need an office, I do not spend money on rent, cleaning, security and heating. Workers get paid for specific projects, and if I don’t need someone, we will stop working.
I do not need to pay salaries if there is no work temporarily.
This approach makes the business more resilient in a fluctuating market. Profit goes to the development of projects that generate revenue, and during downtime, costs are reduced to a minimum. Large players cannot afford it.
2. Flexibility outperforms tight planning
Business worship calendars and plans. Every day people come to work, check the schedule of meetings, plan project launch dates.
For some projects, deadlines are appropriate, but what if the market requires an accelerated launch?
In large companies, it is almost impossible to launch a product in the shortest possible time. Schedules are drawn up for the year ahead. What should I do if an additional team needs to be connected to the project, and a new project will take a long time?
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Dismiss or pay salary, despite the simple?
In large companies, projects are tied to the fiscal year. If the tasks are solved too quickly, they have to be stretched to finish by the planned date.
Without flexibility, a business cannot save a budget and move quickly to new projects.
In Moderite, a contract is concluded with each artist, which is automatically terminated upon completion of the project. When a new job appears, the person is again invited to the team.
There are disadvantages to this approach. Talented specialists will be happy to move to a permanent place in other companies as soon as they stop receiving work and money.
To solve this problem, Moderite attracts people who are interested in part-time work – students and those who are looking for part-time jobs. They have other activities.
When the project ends, they don’t rush in search of a permanent place and readily return when tasks appear.
With this flexibility, Moderite can launch a new project in a few days. Product creation occurs when the market requires it, and not at the end of the fiscal year.
Large players are forced to refuse orders if they do not fit into the plan.
3. Ideas are not enough
There are people who gush with ideas, but don’t know how to realize them. They find investors and a team, but in the end, the gap between dream and reality is too big.
Not enough money and time, too many requirements, the physical impossibility of a solution …
Visionaries treat the idea as their child – with love and faith in a happy future. They continue to pull the project, turning a blind eye to the lack of prospects. The result is a failed deadline, lame functionality, a tight budget.
Market Glut: Tips for IP.
In large businesses, this happens often, because the budget is managed by people who are divorced from the applied problem solving. They support incendiary ideas that are far from reality.
Even when the tops understand that something is going wrong, they turn a blind eye to the problem. It’s easier for them to lose millions than to acknowledge the failure of an idea.
It is impossible to implement a project divorced from reality. All that can be done is to go over to the real ideas of people who implement real projects.
A small business can outperform a large one if the proposals are developed by specialists, rather than dreaming executives.
The smaller the scale, the faster you can detect the error. And you will not lose millions because you do not have them.
4. Opportunities for quick hiring
An urgent search for specialists is a sore spot for large companies. A week is spent on drafting an application and communication with the HR department, another week is spent on filling out and placing a vacancy, several weeks are spent on interviews.
Then you wait for the candidate to work a month before leaving, or pay compensation to the company. The project manager has to make a choice: slow down the work for at least a month and a half or spend the budget.
For small companies, finding employees is even more difficult. The company is not known to anyone, and it cannot offer the same working conditions as market leaders.
As the main recruiting tool, I use communication at thematic events, master classes and meetings. My target audience is college students and people.