Go big by starting small

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.

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