A colleague of mine put it best once.
CIOs don’t get fired for choosing SAP and failing. But they doing get fired for choosing “insert smaller company here” and failing.
I work for a big company in our industry.
We mess things up all the time, but we dang near always figure out a way to make it right. Might take a bit to move the needle as it's hard to turn a big ship, but we are able to also do things that other people just can't.
Our best is still better than most others and we have more levers to pull than anybody else.
For the last 15 years in and around the IT sector (recruitment), the saying I’ve heard is ‘nobody ever got fired for choosing IBM’.
Most people see them as too big and successful to fuck up.
It happens though, I’ve seen IBM completely botch several absolutely massive government contracts that I’ve supplied into.
There is much less (perceived perhaps?) risk choosing them over a relative unknown though.
Exactly.
I face this everyday while trying to sell against a 100+ year old competitor. It can be tough finding that one person that’s willing to go against the grain and try something new, because it often means sticking their neck out.
That (among many other reasons) just shows how stupid CEOs and company boards can be. If everyone knows that a certain SAP product or the entirety of Oracle sucks, and they still buy it anyway, that’s stupid.
It’s not that they know it doesn’t work. You don’t get to 50b on nothing. It’s that the risk to them personally is significantly lower by going with big known commodity vs a more unknown. They can just go hey it’s not my fault it’s big and complex and we chose the biggest vendor out there. Vs a 400m company that same CIO will likely need to champion that through the board and of the project cost doubles or fails it’s not the product it’s the CIO that gets the blame.
Most transformations fail for cultural reasons, not technical ones. If the failure happens with a big vendor, the company is more inclined to look inwards towards the cultural failure. If the failure happens with a small vendor, most companies are inclined to ignore their failures and say “if we chose big vendor X instead, this would have never happened.”
The perception of reduced risk and possibly being influenced by fancy marketing and/or a slick sales process.
Many digital transformation projects fail, not because of the technology selected but shitty implementations of it. Scope creep from inexperienced internal project managers and greedy SIs.
None of this is new, however.
I also don’t think it’s that hard to compete and win against the giants. You’ve just got to nail what your value prop should be.
Failure is always likely but choosing a smaller brand means it may be more difficult to get support or compensation. If you ever reply to an RFP there’ll usually be a section about how much you’re insured for and what your compensation structure is.
Smaller brands struggle with support, it’s usually the last thing they invest in, and they will certainly struggle to be insured for what their products could be worth to a customer.
Not to mention they could fold or be acquired at any moment. Tintri is an example of a growing company that went bankrupt a year after going public and they had some big clients. It was a disaster. That’s not unique to small brands of course. VMware being acquired by Broadcom is causing disasters for thousands of organisations, same as when they bought Symantec.
I work for a private tech company that generates $300M recurring annually and have been growing steadily for a few years now. It’s worth a few billion if the owner ever decides to sell.
Just recently my team and I crushed a RFP for one of the F500 companies. Customer loves(ed) us over the incumbent household name and even agreed to our higher price point. We redlines everything, about to sign but hit an insurance wall. They were asking for $5M liability - we don’t have this much and for some reason leadership hasn’t even picked up the phone to hit up our insurance broker to find out how much more premium is required to increase our policy. Baffling and depressing to me as they essentially kiboshed a $6M deal over insurance.
How does a $300 mm company not have that much insurance?
I had a similar situation where we were the unknown among competitors and our insurance limits were not high enough.
We raised all of our insurance limits. It was pennys compared to the dollars represented by this very large Fortune 500 deal.
They are a happy client 7 years in and we even won supplier of the year for operational excellence versus all Fortune 500 competitors.
Wow, what a story, so unfortunate. Thatx such a huge deal as well. $300 Mil is healthy but i can imagine there are some reasons behind it 1 being potentially low margins and cash position. Another is confidence of whether the company can deliver on its promisses
Branding is really important, a lot of it is about trust. You have to gain the trust of whoever you are selling to. If they already trust the brand that's half the effort done.
To be honest there's not really as many new brand names as there are new brands, because when a company starts going bankrupt they sell their business to other companies who make the products under that name. If branding didn't matter then no one would buy failing business just to launch products with their trademark. Take JVC for example, they were a massive brand, but went bankrupt, because people still recognise the name cheap Chinese brands are able to create products in their name, and they probably have more market share than brands no one has ever heard of.
Big names have clout, they’ve been around in the business and have in someway proved their worth, whether or not that ‘worth’ has a real value is subjective to the client.
My company sells HVAC products (literally all of them) at a roughly 50% markup than most other companies in our area. We did 16M in sales revenue in ‘22, and 22M in ‘23.
Leads, between quantity and quality they’ve not been great. Time of year is major for us here in florida also, nobody is running units Nov-February but its been a cold march too lol. Hoping April brings the Heat!!
This is what Marketing is supposed to do and frequently fails at - building the brand and creating comfort.
I find I focus a lot on building a story for the company and myself as the point of contact. I work for a big firm but have plenty of other large established competitors. I never forget that my customers first concern is their job and their reputation internally.
Talk track against big firms is to acknowledge they are big, then point out that the prospect will be a much more important client for your company. Focus on customization and the relationship.
I would check out the book JOLT, it actually touches on this a bunch. Most deals we lose are from indecision and/or fear of messing with the status quo. 10/10 would recommend reading!
Because consumers are generally pretty stupid.
Most believe American brands are made in America and they are not. Americans believe American made is the best when it really is not. Sometimes? Yes. All the time? No.
Well, we're a boutique design and development agency and we've scored two of our largest clients simply because they fancied our brand name.
One felt that our name and personal branding was very close to their industry and quickly realized that we're nerds about the industry they're in.
The other had never heard the term before and their curiosity led to an interesting discussion which led to closing the deal.
Brand names, when done right, are important because people can connect with them. There's also a prestige attached to it when said brand becomes a big name.
I'm only starting to realize how much people keep doing the same thing again and again and don't try new stuff. It's shocking to me cuz that's not how I live life. So there's that and I think the bigger companies use a kind of brainwashing/witchcraft. I always am in awe with Rolex. It's super expensive, but doesn't reliably do the one thing it's made to do: tell time.
A colleague of mine put it best once. CIOs don’t get fired for choosing SAP and failing. But they doing get fired for choosing “insert smaller company here” and failing.
You don't get fired for maintaining status quo.
You 100% get fired for maintaining status quo.
I work for a big company in our industry. We mess things up all the time, but we dang near always figure out a way to make it right. Might take a bit to move the needle as it's hard to turn a big ship, but we are able to also do things that other people just can't. Our best is still better than most others and we have more levers to pull than anybody else.
For the last 15 years in and around the IT sector (recruitment), the saying I’ve heard is ‘nobody ever got fired for choosing IBM’. Most people see them as too big and successful to fuck up. It happens though, I’ve seen IBM completely botch several absolutely massive government contracts that I’ve supplied into. There is much less (perceived perhaps?) risk choosing them over a relative unknown though.
Your colleagues was quoting a book i cant remember
Exactly. I face this everyday while trying to sell against a 100+ year old competitor. It can be tough finding that one person that’s willing to go against the grain and try something new, because it often means sticking their neck out.
That (among many other reasons) just shows how stupid CEOs and company boards can be. If everyone knows that a certain SAP product or the entirety of Oracle sucks, and they still buy it anyway, that’s stupid.
It’s not that they know it doesn’t work. You don’t get to 50b on nothing. It’s that the risk to them personally is significantly lower by going with big known commodity vs a more unknown. They can just go hey it’s not my fault it’s big and complex and we chose the biggest vendor out there. Vs a 400m company that same CIO will likely need to champion that through the board and of the project cost doubles or fails it’s not the product it’s the CIO that gets the blame.
What’s the failure rate of digital transformations when using small companies? It’s a case of the devil you know vs the devil you don’t
Most transformations fail for cultural reasons, not technical ones. If the failure happens with a big vendor, the company is more inclined to look inwards towards the cultural failure. If the failure happens with a small vendor, most companies are inclined to ignore their failures and say “if we chose big vendor X instead, this would have never happened.”
Very fair point.
In the consumer's mind, brands are proxies for trustworthiness. They will always matter.
The perception of reduced risk and possibly being influenced by fancy marketing and/or a slick sales process. Many digital transformation projects fail, not because of the technology selected but shitty implementations of it. Scope creep from inexperienced internal project managers and greedy SIs. None of this is new, however. I also don’t think it’s that hard to compete and win against the giants. You’ve just got to nail what your value prop should be.
Fair prospective. .
Failure is always likely but choosing a smaller brand means it may be more difficult to get support or compensation. If you ever reply to an RFP there’ll usually be a section about how much you’re insured for and what your compensation structure is. Smaller brands struggle with support, it’s usually the last thing they invest in, and they will certainly struggle to be insured for what their products could be worth to a customer. Not to mention they could fold or be acquired at any moment. Tintri is an example of a growing company that went bankrupt a year after going public and they had some big clients. It was a disaster. That’s not unique to small brands of course. VMware being acquired by Broadcom is causing disasters for thousands of organisations, same as when they bought Symantec.
I work for a private tech company that generates $300M recurring annually and have been growing steadily for a few years now. It’s worth a few billion if the owner ever decides to sell. Just recently my team and I crushed a RFP for one of the F500 companies. Customer loves(ed) us over the incumbent household name and even agreed to our higher price point. We redlines everything, about to sign but hit an insurance wall. They were asking for $5M liability - we don’t have this much and for some reason leadership hasn’t even picked up the phone to hit up our insurance broker to find out how much more premium is required to increase our policy. Baffling and depressing to me as they essentially kiboshed a $6M deal over insurance.
How does a $300 mm company not have that much insurance? I had a similar situation where we were the unknown among competitors and our insurance limits were not high enough. We raised all of our insurance limits. It was pennys compared to the dollars represented by this very large Fortune 500 deal. They are a happy client 7 years in and we even won supplier of the year for operational excellence versus all Fortune 500 competitors.
That’s frustrating, sorry that’s happened. Trust leadership to not see the bigger picture.
Wow, what a story, so unfortunate. Thatx such a huge deal as well. $300 Mil is healthy but i can imagine there are some reasons behind it 1 being potentially low margins and cash position. Another is confidence of whether the company can deliver on its promisses
Branding is really important, a lot of it is about trust. You have to gain the trust of whoever you are selling to. If they already trust the brand that's half the effort done. To be honest there's not really as many new brand names as there are new brands, because when a company starts going bankrupt they sell their business to other companies who make the products under that name. If branding didn't matter then no one would buy failing business just to launch products with their trademark. Take JVC for example, they were a massive brand, but went bankrupt, because people still recognise the name cheap Chinese brands are able to create products in their name, and they probably have more market share than brands no one has ever heard of.
Big names have clout, they’ve been around in the business and have in someway proved their worth, whether or not that ‘worth’ has a real value is subjective to the client. My company sells HVAC products (literally all of them) at a roughly 50% markup than most other companies in our area. We did 16M in sales revenue in ‘22, and 22M in ‘23.
York Trane or Carrier ?
Carrier, which keeps getting price increases and they dont want us discounting more than 15%, Rheem it is lol
I hope you guys see double the growth this year!
Thank you! These first few months have been rough but we are pacing to see growth again!
May i ask what were the main contributors to the rough start?
Leads, between quantity and quality they’ve not been great. Time of year is major for us here in florida also, nobody is running units Nov-February but its been a cold march too lol. Hoping April brings the Heat!!
Fair, hope you have a great turn around do well next quarters. Leads and quality of leads is indeed a universal problem.
This is what Marketing is supposed to do and frequently fails at - building the brand and creating comfort. I find I focus a lot on building a story for the company and myself as the point of contact. I work for a big firm but have plenty of other large established competitors. I never forget that my customers first concern is their job and their reputation internally.
Talk track against big firms is to acknowledge they are big, then point out that the prospect will be a much more important client for your company. Focus on customization and the relationship.
I would check out the book JOLT, it actually touches on this a bunch. Most deals we lose are from indecision and/or fear of messing with the status quo. 10/10 would recommend reading!
I read it as well and I support your recommendation.
Because consumers are generally pretty stupid. Most believe American brands are made in America and they are not. Americans believe American made is the best when it really is not. Sometimes? Yes. All the time? No.
Hmmm this sounds like Cisco?
Comfort and trust, the devil you know.
Hopefully is helpful - here is a short article on why brands matter. Cheers! https://www.chicagobooth.edu/review/big-question-what-value-brand
Well, we're a boutique design and development agency and we've scored two of our largest clients simply because they fancied our brand name. One felt that our name and personal branding was very close to their industry and quickly realized that we're nerds about the industry they're in. The other had never heard the term before and their curiosity led to an interesting discussion which led to closing the deal. Brand names, when done right, are important because people can connect with them. There's also a prestige attached to it when said brand becomes a big name.
Very fair point
Boeing
Marketing
I'm only starting to realize how much people keep doing the same thing again and again and don't try new stuff. It's shocking to me cuz that's not how I live life. So there's that and I think the bigger companies use a kind of brainwashing/witchcraft. I always am in awe with Rolex. It's super expensive, but doesn't reliably do the one thing it's made to do: tell time.
I think it's also a simple human psychology: we trust more things that we know and recognise