That is an outstanding observation...and presented in simple terms that even someone like me can grasp.
As I think about it, that's probably why I have always worked for smaller companies. 1) I personally feel my imput and efforts make a difference and 2) I personally interact with our clients to resolve issues that may arise.
I tried working for "the Big Guys" a couple of times and never lasted more than a year. The ratio of people who show up with a different agenda "other than taking care of the customer" is too large.
There are only a few companies, in the traditional sense, that do a good job: Southwest Airlines and Nordstrom's have reputations from employee's and customers that books and seminars are produced based upon their focus on the customer.
Many web companies such as Ebay or Amazon seem to
focus on user feedback and ratings to keep track of customer's experience...and it seems to be working, at least for those two companies. There has to be someone watching and reacting to those numbers. But I have no personal experience of what happens when something goes wrong and you have to speak to "a real live person" to get your issue resolved.
So in respect to a startup, it brings you to what your goals are?? Is it getting big...I mean really big...then you will find yourself in the same position as the rest of "the big guys", or maybe you could break out and have a reputation like Nordstroms or Southwest. The odds are really against you. Or you could take the "User Rating System" but then you have given your vision off to the customer...which might be a good thing, but then it might not...we don't have much history about it yet.
Or you can find that spot in the market that you excell in, software, hardware, retail...fishing lures, whatever. The part of the market that you Know! You have the answers, the applications, you know the questions to ask...you've already make all the mistakes. You can have a great company, that makes you and your team a very good living...maybe not billionaires...but still a very good living. That also has your vision and personality and those you surround yourself with. So you have to understand and be comfortable with what your goals are. I'm sure being a billionaire has it's perks...so if that's what you want...go for it. But there other measures of success that can profitable too and you get be in charge of a great company too.
Just my nickles worth...sorry I got so long...
A very sensible post.
Insofar as my experience goes, big guys tend to focus on potentially large segments or atleast on those that appear so. They would want some quick action, grab market-share fast and establish themselves as leaders.
So long as startups keep themselves out of radar, they need not fear competition from the heavyweights but then they run the risk of being small all the time.
I have also seen the 'programmer mentality' in the big guys approach to products that doesn't endear their products at all. I remember watching one demo of a personal finance software from a leading company where the user is forced to remember the 16 digits of his credit card while logging a transaction!!!
Competition from another startup can be comforting because they would help grow the market and contribute to a better product from your own stable.
i agree customer service is the key, your going to find it hard to compete on price but your genuine caring factor is hard to beat.