Of Sharks and Pilot Fish

Often the best strategy for a startup is to swim with the (big) fishes.

gk on January 27, 2012 in Entrepreneurship About a 1 minute read.

Yesterday, I was lucky enough to spend some time with Howard Lindzon, CEO of StockTwits, and investor-extraordinaire (Angel, fund, and market). Howard is a super-smart guy, and shared a ton of great insights with us.

At one point our conversation turned to business strategy, particularly in highly dynamic and evolving markets populated with major players. A cool analogy developed -- these markets tend to be dominated by sharks: huge companies seemingly unstoppable and devouring everything in their path. You know the usual suspects: Google, Twitter, Amazon, Apple, etc.

It is rarely smart for a startup or resource-constrained company to take these sharks on head-on, but they are never perfectly efficient and they always leave opportunities unattended. A very viable strategy when entering any of these markets is to ask yourself: 'How can I be a pilot fish?' Pilot fish cruise along with the sharks, letting the shark do all the hunting and chasing and killing while they are able to get fat and happy on the scraps.

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