No less than five years ago, there were but a handful of internet/multimedia companies in Atlanta. Today there are hundreds, and they come in all shapes and sizes. Mom and pop organizations operate out of bedrooms and garages. Mid-sized companies do brisk business from offices throughout the city, and new shops pop up regularly, dotting the corporate landscape the way churches and gas stations used to bookend small towns.
As Atlanta's interactive community has grown, competition has increased. Smaller companies not only compete with each other, but in some cases run up against the titans of Silicon Alley: iXL, USWeb/CKS, and IBM Interactive. As the playing field becomes more crowded, the question begs to be asked, how can smaller companies compete with the "big boys"?
You're only as big as your image.
Small companies have a lot to offer. In general, they place clients higher on a priority list, are able to deliver quick, personable service, can draw from a diverse pool of freelance and contract creative talent, and place a high emphasis on innovation and creativity. Of course, there are smaller companies that don't have the resources or business etiquette to do quality work, and this can have a negative effect on the entire community. If a large client has had a bad experience with a small company, it may take an act of God to get them to do business with a small company again. If a large company has never done a project before, choosing a company to work with can be a difficult proposition. With hundreds of small companies, all with hip and cool names, it may be difficult for someone outside of the industry to know who is reputable and who's got a bad reputation, to separate the wheat from the chaff so to speak. In such an instance, stalwarts like IBM often win on name recognition alone.
"Larger companies are happy to give tiny jobs to smaller companies," says Mike Wittenstein, Executive Consultant at IBM's e-business National Consulting Practice. "But when it comes to more significant work, they tend to go to larger companies."
Larger clients often have pre-conceived, and often unfounded concerns about dealing with smaller companies. "They have questions like; what if something goes wrong, will a small company have the resources to handle it?" Wittenstein says. "What if they miss a deadline? What if they get a bigger client?"
Larger clients favor larger companies because typically they have more resources at their disposal: more cash, more people, more research capabilities and access to newer, sexier technology. "Larger companies charge more for the same services," Wittenstein says. "But they offer the comfort of name-brand recognition, a track record, well-developed project management systems and time-tested processes that result in a sense of risk-reduction for some clients."
Wittenstein has a unique perspective on this issue, having worked for both teams. His company, Galileo, had fewer than ten employees and was one of the early players in Atlanta's multimedia production community. Now, as an Executive Consultant for IBM, he's signed on with the largest business and IT services company in the world. "The game is very different from each perspective," he says. "Smaller companies tend to focus on capabilities when selling a project. The principals, often owners themselves, talk specifically about what they can provide; how the web pages will look, the quality of the graphics, the kind of technology they can employ…what they can do for the client. A sales representative from a larger business will look at the broader picture and ask ‘how will the client use this technology? How will it fit in with the client's larger plan?' The bigger companies go to where the client's pain is."
Most of the time, clients are more interested in capabilities. They see things in terms of product for dollar and don't look towards the bigger picture. However, if you, as a small internet development company can exhibit a combined command of the technology and marketing impact of your services, you are setting yourself above your competition.
You are your own best asset
"We've overcome concerns big clients have about working with small companies by showing them our track record," says Jerry Harris, Vice President of C-Graphix, a full service multimedia production company. "We've developed a strong client list and a body of work we are proud of," he says. "Most of our business is by word of mouth."
Word of Mouth marketing is crucial to small businesses that don't have the budget for billboards, radio spots, or full page print ads. To be competitive, you have to stay in business and to stay in business your clients have to know who you are and what you do. Word of mouth is the best way to accomplish this. In addition to spreading your name, you're spreading your reputation. Of course, the best way to develop a word of mouth network is to do work that exceeds your client's expectations: meet deadlines, come in under budget, and do fantastic creative. "We put our heart and soul into each job because we know we're going to need that job in our portfolio," Harris says. Your client's satisfaction will also be needed as a reference.
Think of your company as your biggest client. Find out what it would take to please you and create materials that represent that. Put as much care and thought into your own multimedia products as you would your client's, especially your website. Your website is the first indication your clients will have as to how your company will represent them.
"We've approached our own company impartially, as if it were another client," says Lisa Scaun, Director of Communications for the Virtual Marketing Group. "We created our own strategic plan and had each department say what they would like to see for the account before we implemented it." Lisa Paterno, Chief Operations Officer for the Virtual Marketing Group, adds that her company's marketing efforts aren't limited to the internet. "We take a multi-pronged approach. We've done everything from pro-bono work to sponsoring fundraisers that promote our company while giving back to the community."
Susan Leithner of Nuance Media agrees that some of the best marketing opportunities are often not so obvious. "I've found that a great way to reach clients is by teaching workshops. You get yourself in front of 20 or 30 potential clients by teaching a class, and that gives you a certain level of credibility," she says. "Instead of saying ‘you should hire me,' you're showing your knowledge and skill in an indirect, more convincing way."
In addition to teaching, Leithner makes use of all free resources available to her, including publications, print directories, and links from local business directory websites. "We also pitch stories and do press releases to magazines small business owners read," she says. "Publications like FastCompany and YourCompany." Teaching workshops and pitching magazine articles "has an indirect effect on our bottom line," she says. "Sometimes you don't see a result from these efforts for six months, then someone will call and say ‘I was a student in one of your classes. We have a project we'd like you to do.'"
Utilizing different, non-traditional marketing techniques can take a lot of effort, so it's important to know exactly who you're trying to reach. Leithner knows her client base has historically been comprised of small business owners, so it is small business owners she targets with her promotional efforts. "Preach to the choir," she says.
It's also important to have a clear vision of the kind of work you company wants to do. "A small company needs to choose carefully the type of projects they get involved in," says Mike Wittenstein. "That decision should be based on what kind of company you want to be, what kind of competencies you want to have, and how you want your brand to work."
Waitsel Smith specifically set out to find a company name that expressed his core competencies, and the way he wanted his business to work. He found it in two words: Creative Sharks. "In advertising a shark is usually someone who wears a suit, is very aggressive, sometimes ruthless but very good at what they do. I thought the idea of combining creative with a suit guy was good, and I saw a lot of potential for using the shark motif in advertising." Every time Smith sends out a shark tooth mailer, or a copy of his business card with a bite taken out, the message he is trying to get across about is driven home loud and clear. "Everything we do adds up to make the impression that we're a creative firm with good ideas. You can see that with what we've done for ourselves."
Your Head is Above Your Shoulders
Having a good niche and sticking to it is one of the best ways to stand up against competition, after all there are hundreds of internet production companies out there. What does yours do that makes it special?
The Virtual Marketing Group has found its niche in business to business communications. "We have people with strong experience in the health care industry, in automotive, in retail, and in information technology," says John DeWitt, president of VMG. "We pursue business industries based on what our people know. We see their experience in these industries as our areas of strength." DeWitt is quick to point out that he would rather seek clients in the industries his employees know than trying a shotgun approach to getting new clients. "We don't stand out just as an Internet developer," he says. "We stand out because we know particular industries, which makes it possible for us to promote businesses in those industries on the web."
Susan Leithner saw a need for international services on the Internet when she founded Nuance Media. Her company translates websites to global languages, and makes web content appropriate for different geographical regions of the world. "When we started Nuance Media, there were so many multimedia companies out there," she says. "We quickly realized if all we offered was multimedia services and website design, then we'd be in a difficult situation."
Leithner's foresight is unique. Not only are her services as a web developer valuable to companies developing their very first website, she has something to offer companies that already have a web presence and are looking to expand into other markets. She also has something other web development firms will need from time to time, which in effect turns her competition into a potential client base. "Running a small business can be difficult," she says, "but it would have been much more difficult if we didn't have our niche."
Your Competition is Your Strength
John DeWitt says the current business climate is good for small to medium sized companies. "There is a lot of work, and a lot of opportunity for smaller companies, especially if they partner," he says. Partnerships already exist for a lot of creative services. Artisan comes to mind in the video sector, King Plow Art Center in graphic arts, copy, and design. By pooling resources, smaller companies can perform on larger engagements with lower transaction costs and a level of flexibility and risk control almost equal to that of larger companies.
"Find someone that compliments your strengths and work with them," says DeWitt.
Everything from Human Resources to Accounting Services can be hired out. "I've heard there is even a creative services account team out there for hire," says Wittenstein. "It's just the sales guys. They'll front end your business and leave you to do what you do best, be it creative, technology, marketing, whatever."
In addition to these alternatives for more liquid business structures, technical advances are making it possible for smaller companies to produce quality work at lower price points. The cost of entry into the industry is dropping, as is the learning barrier. This is not to say it's going to be any easier to run a successful multimedia production company, creatives will still need to be expert designers, understand marketing and strategy, and be savvy business managers. It just means the playing field is evening out.
There is also more acceptance by larger companies in dealing with smaller businesses and cooperatives. "Large corporations have become more accustomed to dealing with virtual suppliers," Wittenstein says. "In some cases, they're seeing this as a very favorable scenario. When smaller companies join forces, the client pays for performance instead of overhead and the promise of risk reduction."
Flexible structures and strong contract networks helps cooperatives of small companies respond quickly to client demands. "Sometimes a company will come to us with a huge project that needs to be done in a month," DeWitt says. "We have the contacts and resources to scale up quickly. We have access to a network of people working from their homes that can deliver work that is as good, or better than, that delivered by a larger, more rigidly structured company."
Smaller companies can also move quickly to handle internal demands. "If my employees need a new computer to work faster, I can get it for them," says Harris. "In a big company you have to go through a lot of red tape just to get a post-it note!"
The Future Begins Now
Small companies may have competitive advantages they aren't even aware of. To remain competitive requires creativity, which comes in spades for most multimedia production companies, but it also requires business savvy and a keen marketing sense. Opportunities abound for partnerships and cooperatives, which allow all players to retain a large degree of their individuality while offering services on par to those offered by larger web developers.
"Atlanta's creative and interactive communities are strong, and will continue to be strong," says Mike Wittenstein. "Atlanta has built a reputation as a strong resource by the great work that's been done here. It's important to keep doing our best work as individuals and as collaborative teams because everyone's work feeds off each other's in the long run."
Waitsel Smith sees small companies playing a major role in helping Atlanta maintain its reputation as one of the best centers for web development in the country. "I'd like to see Atlanta with a lot of small shops," he says. "In advertising you see a lot of small companies doing the most creative work. I'd like to see Atlanta be a hotbed of creativity for web development firms, and I think that's only going to happen if these smaller shops maintain their identities, and forget about trying to be the biggest fish in the pond."