Archive for January, 2008

Go big by starting small

January 31, 2008

Business Week has an interesting story about how the tables are being turned on where technology first gets adopted. It used to be the small & medium sized organizations waited for the trickle down from what was being implemented at large corporations. The article highlights how the reverse is now happening. That is, small & medium businesses are adopting technologies that are then migrated upstream. Salesforce.com and RightNow Technologies are two examples cited. This is instructive for companies developing their go-to-market strategies.

I’ve observed this going one step further. That is, there are a number of examples where consumers and end users are adopting technologies before businesses and/or their own companies. Recent examples include instant messaging, peer to peer technologies, social networks and blogging. They’ve all started at a grassroots level before moving upstream. In most cases, new features have to be added to address organizational issues but they’ve already overcome the biggest obstacle — end user adoption — so the feature investment is well justified. In the early days, with consumers/end-users, the bar for bulletproof software is lower which is a plus while the young company is tight on resources. Over time, the bar will raise for a variety of reasons (req’ts of enterprise customers, scalability, competition, etc.) and the organization may require more funding/resources to scale. Tim Oren had a good post earlier in the year on two-stage companies that fit with this approach.

Update: Payscale is another example of a business that started at the end user or small business level before moving upstream. This article highlights what they’ve done.