Little Is The New Big

Question:

It seems that for us, it is getting harder and harder to compete against the so-called "big boys." With their budgets and know-how, big business seems to have it all over small business. What are we to do?

Answer:

I could not disagree more. In fact, I will contend that there is, right now, a change occurring in business so profound, so new, and so unexpected, that things will never be the same.
We stand at the threshold of a new era, an era that will change business for sure, but which in fact is also changing the world at large. What revolution is that, you ask?

Little is the new big.

Not so long ago, big was big. The 1970s and '80s were a time when bigger was indeed better. Television was still ruled by the Big 3 networks and auto sales were dominated by the Big 3 automakers. Long distance telephone service was monopolistically handled by AT&T and corporate mergers turned large companies into corporate behemoths; Chevron's acquisition of Standard Oil in 1984 for $13 billion was the largest merger in history. Geopolitically, two giant superpowers ruled the globe.

But things began to change as the 1990s dawned. Politically, the breakup of the old Soviet Union and the Warsaw Bloc from monolith into 15 small republics and eight newly independent nations signaled a new era; an era where small yet nimble was suddenly more important, and more powerful, than big and cumbersome.

Both politically as well as business-wise, the tide from big to little has accelerated in this new century, bringing us now to a tipping point — where little is indeed the new big.
Consider these "little" innovations being pushed by big business:

• The Mini Cooper auto
• Apple's iPod Mini (Apple recently decided to delay its international launch of the hugely-successful product because domestic demand far exceeded supply)
• Bitty Burgers — available from Levy's restaurants, these mini-burgers were available at four ballparks this year.
• Google's little boxed, yet highly effective, ads

The causes, as I see it, are the twin tides of government deregulation and technological innovation. In the past 20 years, the energy, banking, airline, and telecommunications industries, among others, have been deregulated with the specific intent of creating small companies that could compete with the established titans. That such measures succeeded is beyond dispute.

Consider for example the airline industry. After deregulation, huge old stalwarts like the venerable Pan Am and the mighty TWA vanished into thin air because they could not compete with smaller, innovative upstarts like Southwest. Small beat big because small is quicker, leaner, meaner, hungrier, more entrepreneurial, and more innovative.

But it wasn't just legislation that got us to the point where small is big. The technological computer telecommunications revolution is equally responsible. It was the vision of some computer geeks in San Jose and Seattle that lit the match that set the world on fire. Both the home computer as well as the Internet have leveled the playing field and turned every little individual into potentially a big player:

Consider eBay. If ever there was proof that little is the wave of the future, eBay is it. eBay was founded in Pierre Omidyar's San Jose living room in September 1995 on his home computer. Since then, eBay has become one of the most successful companies of the new millennium by turning traditional business theory ("bigger is better") on its head. eBay succeeds by tapping the power of little, by allowing individuals to create a consortium of online mom-and-pops shops that, when taken together, has become the largest garage sale in history.

No, in business, bigger is no longer better. The disastrous AOL-Time Warner merger is proof of that. Today, the smart business must be return to its small entrepreneurial roots. It must think big but execute small. By so doing, it can not only react to change quickly and efficiently, but it can harness this new zeitgeist for its own benefit.

Can small business compete? You bet. Little is the new big.

Today's tip:

How does the captain of a huge ocean liner change course? Yes, he turns the ship's wheel, and the wheel turns the rudder. But it is not the rudder that turns the ship, it is actually a small subsection of the rudder called the trimtab. The tiny trimtab turns the rudder, and the little rudder turns the giant ship. It is the small business, and the big business that executes in a small way, that are the trimtabs of the new economy.

Steven D. Strauss writes a weekly Ask an Expert column focusing on issues related to business, particularly small businesses, such as tips on marketing and advertising, finances and employee relations. A lawyer, author, and public speaker, Steve has spoken around the world about entrepreneurship, including at the United Nations, and he has been on CNN, CNBC, MSNBC, "The O'Reilly Factor," and many other television and radio shows. His latest book is The Business Startup Kit. If you would like Steve to speak to your group, help your business grow, or if you would like to sign up for his free newsletter, "Small Business Success Secrets!" please visit his Web site www.mrallbiz.com.