Despite the beliefs of some, entrepreneurs still have some big advantages over large corporations.
As the corporate world has continued to grow over the past few decades, it may seem like entrepreneurs are at a huge disadvantage to large corporations that have more money, more employees and more connections within their industry.
However, there are still some specific advantages that entrepreneurs have and should attempt to leverage when trying to rank with the big boys.
Primary Advantages Entrepreneurs Have Over Corporations:
To quote Indian telecom mogul Sunil Mittal, “When faced with the question of speed or perfection, always choose speed.”
Lets face it, corporations have more money and resources than entrepreneurs. Corporations also have something else – too many cooks in the kitchen.
In order for a project to get approval and then properly assigned in a large corporation, a lot of time is needed to prepare and convince managers and administrators that the project is the right thing to do.
For entrepreneurs, if a project seems fitting, there are few political hurdles that must be overcome for the project to be completed. To use AnsonAlex.com as an example, if I want to do something, I do it! I don’t have to go through multiple levels of approval and review – if I think the timing is right, I pull the trigger.
This is the primary advantage that entrepreneurs have over corporations. It is also extremely important because if, as an entrepreneur, you become the first organization to successfully sell a certain product or service to a particular market, you can bet that corporations in the same industry are going to start spending lots of time and money to improve upon your idea.
This is why it is very important to enter a particular market as soon as possible and, even if your product is not 100%, you can make large gains by entering first.
When it comes to the topic of innovation, entrepreneurs generally have a step up on corporations. It may seem odd based on the fact that large companies have more than enough resources to innovate effectively.
According to an Entrepreneur.com there are 3 primary factors that allow entrepreneurs to be more effective at innovation:
- People and Culture
- Cost and Organizational Structure
Interestingly enough, the speed advantage mentioned above that entrepreneurs have over corporations is also a factor in innovation. Entrepreneurs can quickly act on promising ideas and projects without have to go through the corporate rigamarole.
Entrepreneurs are also more motivated to innovate than corporations. Most employees at a corporation are paid either hourly or by set salaries. Unless there is a clear incentive for employees to be innovative in their job, they are more likely to mechanically work through their job without trying to change the status quo. Entrepreneurs are almost always motivated to pursue promising ideas even they must change their daily workflow to do so.
As we have all witnessed, advancements in technology are occurring at exponential rates and, by adopting new technologies, entrepreneurs can gain an efficiency advantage over corporations and companies.
Many companies have been in business for a long time and still use technologies and business processes from 10 or more years ago. It is very difficult for an organization with a large number of employees to continuously adopt new technologies even if in the long run it would create a competitive advantage.
Entrepreneurs, on the other hand, can constantly be improving their processes and technology infrastructure.
A good metaphor for this situation would be to compare the utility infrastructures of developed nations versus those of developing nations. Developing nations are using the newest and most innovative technologies to build their utility infrastructures while developed nations are continuously spending money to bandage their old utility systems.
Personality has always been a factor that can provide a competitive advantage to entrepreneurs. In modern society however, that advantage is exponential more effective.
Social media has undoubtedly changed the world and, if used properly by entrepreneurs, can really set them apart from corporations.
By having a unique, inviting and empathetic personality, entrepreneurs can differentiate themselves from large corporations by being more responsive to their customers.
By concentrating on the 4 advantages above, entrepreneurs can compete with much larger entities and remain competitive despite disadvantages in funding, resources and human capital.
To close my discussion on the advantages that entrepreneurs have over corporations, I would like to provide a short yet influential video featuring some of the World’s richest businessmen and entrepreneurs on how to be successful in your entrepreneurial endeavors: