Importance of Small Companies
In ecosystems dominated by one or more big companies, smaller partners can feel highly disadvantaged. Yet there are potentially multiple benefits from including smaller companies in your ecosystem. A few of the more common benefits are:
Niche Products/Skills
Small companies typically are successful because they specialize, rather than act as generalists. They may have a more highly developed version of a product/service offered by the bigger players, or they may have a niche that is too small to be addressed by others. We have seen this in multiple industries. When including the smaller partner in a proposed solution, the scope of coverage is increased and the impact can be magnified. Providing this type of holistic solution saves the customer time and money, and promises the ability to make the companies’ offerings work together for the customer’s benefit.
Contributor- Not Free Rider
No one wants a partner who is only trying to ride others’ coattails. Good partners, no matter their size, will be looking to see where they can add value to the ecosystem. The really good partners will even point out where others can bring more value, creatively identifying opportunities and which partners can address them.
Key Contacts
Founders and other key resources in smaller companies often have strong relationships with previous employers and industries. The value of these relationships can be very significant. We have seen cases where these relationships drove the sale, not anything the larger companies did. A little asking around can provide intelligence on which company has the outsized Rolodex.
Outsized Reputation
Small specialist companies that are truly successful often have positive reputations that far exceed their size. These companies have high quality products that are broadly recognized by the marketplace. Indeed, the biggest issue with these small companies may be their ability to service all the business that comes their way. Boutique creative agencies or architectural firms are examples that can fall into this category.
Customer Mandates
The use of a small company with strong products/services or an outsized reputation can be “suggested” or even mandated by the customer(s). In these cases it is important to understand who is requiring the partner be included. Is it a true decision maker or someone lower in the organization?