Small companies punch harder in innovation

Short and active is better than tall and lazy.

It’s about attributes that exceed talent.

Let’s be real: large companies have the advantage when it comes to innovation. They have the money, resources, and talent. But, not every large company can truly innovate.

This reminds me that not every big, muscular person can be flexible or capable of fighting someone trained in boxing. Who is going to lose? The big, muscular person.

The larger the company, the stiffer its "muscles"; the smaller the company, the more flexible its "muscles."

Turn disadvantages into advantages as a small Company

Innovation is challenging in large companies for several reasons:

The complexity of the hierarchy makes obtaining approvals, feedback, and direction time-consuming. New or bold ideas are often rejected outright.

Many large companies are legacy businesses. They often lack the knowledge, tools, and expertise for creative thinking. And problem-solving, even though they have the cash and market presence.

The larger they grow, the less they adopt and adapt to change. It’s similar for individuals: the older you get, the fewer adventures you tend to take.

They feel uncomfortable taking risks. It’s similar to skydiving—not everyone is willing to do it. As a result, some choose to ignore market signals, relying on their own assumptions. While others remain completely unaware of what’s happening around them.

My bad, it’s not just legacy companies that lose innovation to smaller ones. Even the largest technology companies face the same challenge.

The proof is in their actions: they end up acquiring smaller companies. Apple, Google, Microsoft, and Meta acquire small businesses all the time.

Borders, a major bookstore chain, failed to adapt to online retail. Did not embrace e-commerce like Amazon and Barnes & Noble.

Opened too many physical stores. Filed for bankruptcy in 2011, closing 399 stores.

Attributes of small business or team

So, the idea that small businesses can beat large companies in innovation is not only possible—it’s proven.

For a few reasons: small teams can make quick decisions due to a flat hierarchy. They can also learn new tools and frameworks of innovation faster. And their motivation to achieve desired goals is high.

The smaller the company, the higher the efficiency and spirit. What matters most for small teams or companies is the sense of achievement, fulfillment, and self-reward.

They are in it for the thrill of overcoming obstacles. This is one of the best behavioral strategies you can have in any team.

If your company or teams lack the skills or culture of innovation, you should start by educating and upskilling them. At the very least, teach them design thinking methodologies to pick up the pace of innovation and achieve the desired goals.

Stumbling upon a business challenge resembles the joy of playing a video game. It’s like a player trying to figure out a mystery, finding a solution, and moving to the next level.

That’s what innovation is all about. Equip your team or yourself with foundational tools and then let their drive and determination take over to win the challenge.

Small companies succeed by:

• Being agile

• Focusing on customer needs

• Rapidly pivoting and testing new ideas

• Creating a collaborative culture

IndoGo Airlines

Challenged established carriers like Jet Airways in india. Started operations with a single plane on August 4, 2006.

Employed rapid innovation tactics. They adapted to market needs. As of December 2024, IndiGo operates over 2,000 daily flights.

In conclusion, small businesses can leverage resources and knowledge. Such as design thinking, to innovate, stay customer-focused, and craft a unique value proposition.

Innovation is not about company size. but about speed, adaptability, and willingness to challenge existing models. As a small company, you have the attributes needed to beat the beast. Keep in mind: the lighter the load, the faster you can move.

Is there a big beast you want to challenge?

Thanks for reading, we will talk in the next letter.

Ahmed

By the way, here is:

1. A fun way to connect with people that leads to opportunities Toilet Mind

2. A new way to innovate and solve business challenges Neo Strateje