How to beat Goliath (or at least thrive in his shadow)
(Editor’s note: Greg Collier is the founder and CEO of Geebo.com, an online classified advertising site. He submitted this story to VentureBeat.)
When I launched Geebo.com in May 2000, the goal was simple: Provide a web-based alternative to newspaper advertising. The newspaper industry was my Goliath. That wouldn’t last long, though.
Within a few months, I saw Craigslist. I was surprised, at the time, by what I saw as its weaknesses: An outdated, all-text interface and the inclusion of “erotic” ads.
Over the next few years, of course, Craigslist grew to dominate the online community classifieds market. Although it hasn’t always been easy operate in its shadow, Geebo.com also expanded – to 140 communities – and turned a profit. If there’s anything we have learned along the way, it is not to compete on the same terms. We do not try to be Craigslist. In fact, while the services we provide are similar, our approach could not be more different.
Holding your own against an industry giant is a tall order, but it’s not impossible. If you’re facing your own Goliath, here are a few ways to stay competitive.
Differentiate Yourself - Rather than emulate the competition, take advantage of what you perceive as their weaknesses. For example, we monitor the ads at Geebo, so we are not likely to attract the legal scrutiny Craigslist has encountered. We also periodically update both the user interface and functionality of our site and embrace other platforms (including Twitter, Facebook and mobile technology platforms). And we have developed several major corporate partnerships.
Take Alternate Routes - When you are steering a startup, or struggling in the shadow of a Goliath, traditional marketing strategies can be too expensive. One method we developed early on has turned out to be a great alternative. Advertising costs were sky-high during the dot-com rush, so we decided on philanthropy as an alternative approach to raising our profile within the community.
Our first donations were made to the Sacramento Boys and Girls Club, Sierra Adoption Services, Mustard Seed School, and the Child & Family Institute. As it turned out, the television news coverage we received was more valuable than paid ads would have been.
Today we have a robust marketing plan, yet we continue to donate. All of this costs us very little, and it helps build an image that is consistent with our community focus.
Give Great Service – One of the advantages of being small is the ability to get to know your customers. Smaller companies have no reason not to shine in this area. At Geebo, we do this by providing live customer service and monitoring the activity on our site.
A few months ago, we detected what looked like a fraudulent job posting on the site. I immediately called the credit card owner to let him know. I happened to catch him in Hawaii, in the middle of the night, before either he or his bank knew that his card had been stolen. Despite the late hour, this man was incredibly grateful. There is no doubt in my mind that this kind of service builds customer loyalty.
Offer a Test Drive - When you have a great product or service, your first inclination might be to build a mammoth sales force. In the shadow of a Goliath, however, this kind of expense could put you out of business before you realize any significant increase in market share.
We offer large organizations a free trial period as a beta partner, posting their listings free of charge for several months. After they have had a chance to realize the benefits, we convert them to paid accounts – with an 80 percent success rate. And retention of those customers is better than it would be through traditional sales.
Realize you don’t need to beat Goliath - Not every Goliath will fall – and you really don’t need that in order to succeed. Carve out a successful niche or two and, even in a market with a dominant player, your company can still record a healthy profit and a solid position.
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