Mark Andressen’s Startup Guide, Part 5: Moby-Dick's Big-Company Theory
Previous parts: First part , Second part , Third part , Fourth part .
In every startup life comes a time when you have to deal with large companies.
You may be looking for a partner or distributor. Maybe you want an investment. Sometimes you need an alliance for marketing or sales organization. From time to time you need the permission of a large company to do something. Or, maybe, a big company came to you and offered to buy your startup.
The most important thing you need to know at the beginning of any conversation and relationships with a large company is that you are Captain Ahab, and a large company is a white whale Moby Dick [the metaphor and all quotes in the article on the text of the novel Herman Melville “Moby Dick or White Whale ”- approx. trans.].
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When Captain Ahab went in search of Moby Dick, a big white whale, he had absolutely no idea whether he would find Moby Dick or Moby Dick to allow himself to be found; or Moby Dick will try to immediately knock over the ship, or instead will play like a cat with a mouse; or Moby Dick is generally engaged in marriage games with his giant white girlfriend.
What happens is up to Moby Dick. And Captain Ahab will never be able to explain to himself or to anyone else why Moby Dick did this or that. You are Captain Ahab, and the big company is Moby Dick.
And that's why. The behavior of any large company is highly unpredictable for an outside observer.
I always laugh when someone says: “Microsoft is going to make X” or “Google is going to make Y”, or “Yahoo is going to make Z”.
Most likely, even inside Microsoft, Google or Yahoo, no one knows what Microsoft, Google or Yahoo is going to do in any circumstances on any issue. Of course, maybe the CEO knows if the question is really important, but you hardly deal with issues of this level, so it doesn’t matter.
Within each large company there is a very, very complex system of many thousands of people, of whom at least hundreds, and probably thousands, are in leadership positions and think that they have a certain authority in making decisions.
On any issue, many people within the company take part in a kind of voting - it can be eight people, ten, fifteen, twenty, sometimes much more.
When I worked at IBM in the early 90s, they had a formal decision-making procedure called “competition” (concurrence) - a written list of fifty or so managers from all departments of the company on whom this decision can influence, no matter how strong, and collected their opinions. In this case, absolutely any manager could impose a veto on the final decision. This is an extreme case, but even a non-extreme version of the procedure — and all large companies have it, they must have it — is incredibly difficult to understand, even from inside the company, not to mention an outside observer.
You can imagine this as a point of collision of opposing forces that influence the dynamics of decision making on any issue within the company.
Consensus, concessions, nettings, politics, alliance, arguments, educational work, revenge for past mistakes, control over spheres of influence, development groups, product managers, marketing specialists, sales managers, corporate marketing, finance, Eychary, legal, strategic departments, business development, foreign divisions, investors, Wall Street analysts, market analysts, good press, bad press, articles you didn’t even know about, customers, potential clients, former clients, potential competitors' clients, partners, financial statement numbers for this quarter, schedule for this quarter, rating of securities, scheduled meeting last week, scheduled and canceled meeting this week, bonus programs, new employees in the company, employees leaving the company, falling for promotion, promotion, reduction, transferring to another job, who is sleeping with whom, what CEO CEO went to yesterday, and the guy who prepared your presentation in PowerPoint and typed the name of the startup too small kim font so that it is not visible from the back row.
You cannot even identify all those factors that will influence the decision of a large company, especially to understand them and even more so try to influence them.
Back to Moby Dick.
Moby Dick can secretly track you for three months, and then suddenly jump out of the water and make a giant noise, and then disappear for six months, then go back and throw your boat stranded or, on the contrary, give you the exact tip that you need, to harpoon his gigantic carcass.
And you will never understand why.
A big company can study you for three months, then come to you and declare your plans for investment or partnership with you, or buying you, then disappear for six months, and then come up again with a directly competing product that will kill you, or, on the contrary, acquire you and make you and all your employees fabulously wealthy.
And you will never understand why.
The positive side of the relationship with a large company is that in front of you is a potential mountain of whale meat as a trophy.
Sorry, confused metaphors. The right relationship with the right big company can have a huge impact on the success of a startup.
The negative side of the relationship with a large company is that it can knock you over - by hitting you in one way or another, and completely destroying you, but more likely involving you in a partnership on bad conditions that ends up in loss for you or just a waste of gigantic the amount of time at meetings that will detract from the main goal.
So what to do?
First , do not base startups who need to have relationships with large companies to achieve success.
The risk to never achieve the desired deal is too great, no matter how hard you are willing to work to achieve it.
And even if you get the right deal, everything will probably not work the way you want it to.
Second , never assume that the transaction with a large company is completed until you have signed and / or the money has not been credited to your bank account.
There is always something that makes a deal that looked final, shatters or disappears without a trace.
Third , be supremely patient.
Big companies are always playing the hurry and wait game. Over the past few years, I had to deal with one large technology company from the East Coast who played the game “hurry up and wait” for me at least four times - they even made me immediately and hurriedly fly out across the country for lunch with a second face the companies that were called a prerequisite - and at the same time they never promptly did in turn what was necessary.
If you want to get along with a big company, it will take much longer than you think.
Fourth , beware of bad deals.
Right now, I recall one high-ranking startup from San Francisco, who gave extremely great hope, had excellent technology and a unique market offer, and at the very beginning of his activity concluded two partnership deals with large, reputable companies, after which he completely lost all ability to carry out his main business.
Fifth , never in your life assume that a big company will make what you consider obvious.
What is obvious to you - or to any outside observer - is probably not obvious to those inside the company, if you take into account all the other factors that will have their effect.
Sixth , you need to be aware that big companies are more concerned about what other big companies are doing than about what any start-ups are doing.
What can I say, they think about other big companies even more than about their own clients.
Moby Dick thought more about other big white whales than about annoying little people on a funny boat.
Seventh , if transactions with large companies intend to become a key part of your strategy, then be sure to hire a professional who has done this before.
Only the best and most experienced whalers had a chance to take down Moby Dick. That is why senior sales and business development managers pay so much money. They are worth it.
Eighth , do not let the obsession to get hold of you. Do not become captain Ahab. Of course, talk to big companies about anything, but always be ready to end the conversation and return to your core business.
You will rarely find such a startup for which a deal with a large company leads to success, and the absence of a deal leads to a huge defeat.
(However, look at Microsoft and Digital Research around 1981. A really big whale was swimming there).
Last for today.
“- Fountain on the horizon! - is distributed from the mast.
- Where? - asks the captain.
- Three rumba under the wind, sir.
- Left hand drive! Keep it up!
- There are so keep, sir!
- Hey, watchman! And now you see him?
- Yes, yes, sir! They are there a whole herd of sperm whales! And the fountains are let out, and jump out of the water.
- How do you see - give a vote!
- Yes, sir. There is a fountain! More - more - one more!
- Is it far?
“Two and a half miles.”
- Thunder and lightning! So close! All hands on deck!"
J. Ross Brown. "Sketches during whaling sailing", 1846
In every startup life comes a time when you have to deal with large companies.
You may be looking for a partner or distributor. Maybe you want an investment. Sometimes you need an alliance for marketing or sales organization. From time to time you need the permission of a large company to do something. Or, maybe, a big company came to you and offered to buy your startup.
The most important thing you need to know at the beginning of any conversation and relationships with a large company is that you are Captain Ahab, and a large company is a white whale Moby Dick [the metaphor and all quotes in the article on the text of the novel Herman Melville “Moby Dick or White Whale ”- approx. trans.].
')
“And we didn’t spend two days in swimming, when one day at dawn we saw a great many whales and other sea monsters. Of these, one had a truly gigantic size. He approached us, holding his mouth open, raising waves on the sides and churning the sea in front of him. ”
Tuk Translation of "True History" by Lucian
When Captain Ahab went in search of Moby Dick, a big white whale, he had absolutely no idea whether he would find Moby Dick or Moby Dick to allow himself to be found; or Moby Dick will try to immediately knock over the ship, or instead will play like a cat with a mouse; or Moby Dick is generally engaged in marriage games with his giant white girlfriend.
What happens is up to Moby Dick. And Captain Ahab will never be able to explain to himself or to anyone else why Moby Dick did this or that. You are Captain Ahab, and the big company is Moby Dick.
“- Look at Captain Ahab, young man, and you will see that he has only one leg.
- What do you want to say, sir? Did he lose his second leg because of a whale?
- Because of the whale ?! Come closer, young man; He devoured this leg, chewed up, gnawed at the most terrible of the sperm whales who had ever whipped a whaleboat! ABOUT! ABOUT!"
"Moby Dick"
And that's why. The behavior of any large company is highly unpredictable for an outside observer.
I always laugh when someone says: “Microsoft is going to make X” or “Google is going to make Y”, or “Yahoo is going to make Z”.
Most likely, even inside Microsoft, Google or Yahoo, no one knows what Microsoft, Google or Yahoo is going to do in any circumstances on any issue. Of course, maybe the CEO knows if the question is really important, but you hardly deal with issues of this level, so it doesn’t matter.
Within each large company there is a very, very complex system of many thousands of people, of whom at least hundreds, and probably thousands, are in leadership positions and think that they have a certain authority in making decisions.
On any issue, many people within the company take part in a kind of voting - it can be eight people, ten, fifteen, twenty, sometimes much more.
When I worked at IBM in the early 90s, they had a formal decision-making procedure called “competition” (concurrence) - a written list of fifty or so managers from all departments of the company on whom this decision can influence, no matter how strong, and collected their opinions. In this case, absolutely any manager could impose a veto on the final decision. This is an extreme case, but even a non-extreme version of the procedure — and all large companies have it, they must have it — is incredibly difficult to understand, even from inside the company, not to mention an outside observer.
"... and whale breathing often has an extremely strong smell, from which there can be a clouding of the brain."
Ulloa "South America"
You can imagine this as a point of collision of opposing forces that influence the dynamics of decision making on any issue within the company.
Consensus, concessions, nettings, politics, alliance, arguments, educational work, revenge for past mistakes, control over spheres of influence, development groups, product managers, marketing specialists, sales managers, corporate marketing, finance, Eychary, legal, strategic departments, business development, foreign divisions, investors, Wall Street analysts, market analysts, good press, bad press, articles you didn’t even know about, customers, potential clients, former clients, potential competitors' clients, partners, financial statement numbers for this quarter, schedule for this quarter, rating of securities, scheduled meeting last week, scheduled and canceled meeting this week, bonus programs, new employees in the company, employees leaving the company, falling for promotion, promotion, reduction, transferring to another job, who is sleeping with whom, what CEO CEO went to yesterday, and the guy who prepared your presentation in PowerPoint and typed the name of the startup too small kim font so that it is not visible from the back row.
You cannot even identify all those factors that will influence the decision of a large company, especially to understand them and even more so try to influence them.
“On those whales that are bigger, they rarely dare to attack. Other whales inspire them with such horror that they are afraid to even utter their names at sea and carry manure, lime, juniper and other objects with them in their whaleboats to scare them away. ”
Hugo von Troil. "Letters on the voyage of Banks and Soander to Iceland in 1772"
Back to Moby Dick.
Moby Dick can secretly track you for three months, and then suddenly jump out of the water and make a giant noise, and then disappear for six months, then go back and throw your boat stranded or, on the contrary, give you the exact tip that you need, to harpoon his gigantic carcass.
And you will never understand why.
A big company can study you for three months, then come to you and declare your plans for investment or partnership with you, or buying you, then disappear for six months, and then come up again with a directly competing product that will kill you, or, on the contrary, acquire you and make you and all your employees fabulously wealthy.
And you will never understand why.
The positive side of the relationship with a large company is that in front of you is a potential mountain of whale meat as a trophy.
Sorry, confused metaphors. The right relationship with the right big company can have a huge impact on the success of a startup.
"And no matter what else the object may appear in the chaos to graze this monster, be it a beast, a ship or a stone, it instantly disappears in its huge fetid throat and perishes in the black abyss of its belly."
Holland translation of "Moralia" Plutarch
The negative side of the relationship with a large company is that it can knock you over - by hitting you in one way or another, and completely destroying you, but more likely involving you in a partnership on bad conditions that ends up in loss for you or just a waste of gigantic the amount of time at meetings that will detract from the main goal.
So what to do?
First , do not base startups who need to have relationships with large companies to achieve success.
The risk to never achieve the desired deal is too great, no matter how hard you are willing to work to achieve it.
And even if you get the right deal, everything will probably not work the way you want it to.
“Taban! Cried the senior mate of the captain, when, turning round, he saw, over the very nose of the boat, the wide open mouth of a sperm whale threatening them with inevitable death. “Taban, to whom life is dear!”
"Wharton - Death to the Whales"
Second , never assume that the transaction with a large company is completed until you have signed and / or the money has not been credited to your bank account.
There is always something that makes a deal that looked final, shatters or disappears without a trace.
“At dawn, the sentinel again took posts at the tops of the masts.
- See it? - shouted Ahab, as soon as the light spilled over the waves.
“Nothing, sir!”
"Moby Dick"
Third , be supremely patient.
Big companies are always playing the hurry and wait game. Over the past few years, I had to deal with one large technology company from the East Coast who played the game “hurry up and wait” for me at least four times - they even made me immediately and hurriedly fly out across the country for lunch with a second face the companies that were called a prerequisite - and at the same time they never promptly did in turn what was necessary.
If you want to get along with a big company, it will take much longer than you think.
“For God's sake, Mr. Chace! What happened? "- I replied:" The ship collided with a whale, and the hull was broken. "
"A description of the death of the whaler" Essex "from Nantucket, who was attacked in the Pacific Ocean by a large sperm whale, was compiled by Owen Chasse of Nantucket, the senior mate of the said ship." New York. 1821
Fourth , beware of bad deals.
Right now, I recall one high-ranking startup from San Francisco, who gave extremely great hope, had excellent technology and a unique market offer, and at the very beginning of his activity concluded two partnership deals with large, reputable companies, after which he completely lost all ability to carry out his main business.
Fifth , never in your life assume that a big company will make what you consider obvious.
What is obvious to you - or to any outside observer - is probably not obvious to those inside the company, if you take into account all the other factors that will have their effect.
Sixth , you need to be aware that big companies are more concerned about what other big companies are doing than about what any start-ups are doing.
What can I say, they think about other big companies even more than about their own clients.
Moby Dick thought more about other big white whales than about annoying little people on a funny boat.
“And let's say you even managed to whale the harps; Imagine how you would manage with a frisky wild three-year-old with just one rope tied to the tail of his tail. ”
"Bones and rags." Head of the whaling business
Seventh , if transactions with large companies intend to become a key part of your strategy, then be sure to hire a professional who has done this before.
Only the best and most experienced whalers had a chance to take down Moby Dick. That is why senior sales and business development managers pay so much money. They are worth it.
“- O Ahab! - Starbek cried, - and even now, on the third day, it’s not too late to stop. Take a look! Moby Dick is not looking to meet you. It is you, you pursue him in madness! ”
"Moby Dick"
Eighth , do not let the obsession to get hold of you. Do not become captain Ahab. Of course, talk to big companies about anything, but always be ready to end the conversation and return to your core business.
You will rarely find such a startup for which a deal with a large company leads to success, and the absence of a deal leads to a huge defeat.
(However, look at Microsoft and Digital Research around 1981. A really big whale was swimming there).
Last for today.
“And the whale dived under the collapsed hull of the vessel and sailed along the shuddered keel; then, turning under the water, again flew out to the surface, but from the other side, in the distance, and, finding himself a few yards from Ahab's boat, for a while stood motionless on the waves.
“... I am sailing right to meet you, oh everything that is crushing, but not all the beating whale; until the last I fight with you; from the very depths of hell I strike you; in the name of hatred I belch my last breath on you. Let all the coffins and all the hearses drown in one pool! Even if none of them get to me, then let me be torn to pieces, still chasing you, though chained to you, oh damn whale! That's how I throw a weapon!
A harpoon whistled through the air; the whale whipped off; tench ran in a chute with a burning speed - and caught. Ahab leaned over to set him free; he freed him; but the sliding loop managed to twist it around the neck; and silently, as the Turks in a serale squeeze their victim with a string, he was carried away from the whaleboat before the crew managed to catch their captain. A moment later, a fat fire at the free end of the line flew out of the empty tub, knocked down one rower and, lashing along the water, disappeared into the bottomless depths.
"Moby Dick"
Source: https://habr.com/ru/post/31238/
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