Dogs vs. Elephants - Business Nostalgia

Posted by Ravikiran K.S. on January 1, 2006

In a recent discussion with manager of my previous company, we were talking about the take of company in past and how it may have to deal with things from here on. The company underwent an acquisition during last year by a competitor. As opposed to the acquirer killing the acquired firm, it was a kind of reverse acquisition - where people from the acquired company took over the key positions of the acquirer firm. That is, our CEO became CEO of acquirer company. And he placed his trusted people from his previous company into the key positions of acquirer firm.

Analyzing the reasons for such a reverse merger, we found the main reason of acquisition to be the success of our company in getting advantage of adverse market conditions and be profitable. The board at acquirer firm wanted the CEO of our company to take over the execution of their firm and take it to the same heights that he took his previous company into.

There were two primary reasons for the success of my last company: ‘fast & flexible’.

  • They were flexible enough to grab opportunities and tasks that others ignored. Not sure how far they delivered on it. But yes, initial take was good.

  • Execution was carried out so fast to beat competition in the market. Every engineer was kind of over burdened for many months, if not years.

I find comparison of dogs to small businesses and elephants to big ones to be a good analogy. Small business are lean, flexible, fast, and can do all the circus required to get a customer win. Whilst big companies are process oriented, stable, slow in time to market, and provide standard set of services/features for most of their customers. Small companies can take the advantage of their flexibility to address the markets and requirements of the customer that big companies ignore. Big companies however look for long term vision and larger TAMs. For instance, IBM took the contract of maintenance of Russian railways lines across the country. Small companies can’t even think of bidding for such a deal, mainly because of the initial investment requirements.

Big companies can’t afford to be as agile and flexible as small ones because of their sheer mass and investment requirements. That doesn’t stop them finding a way to enter the market OR from entering the market sooner or later.

Just something to ponder over.