5 Ways That Small Businesses Can Compete with Goliaths Like Amazon, Facebook, and Google

As humans, we’re suckers for underdog stories.

A young shepherd boy topples a giant using only a sling and a stone. A 16th-ranked seed from a podunk school knocks off the top team in the March Madness basketball tournament. A squad of amateur hockey players surprises the world by defeating the four-time defending champs in the Winter Olympic Games.

We pass down underdog stories like these because they make us feel more alive. They make the world a bit more exciting, a bit less predictable.

As an avid sports fan, I’ve reveled in athletic underdog stories for years. But recently, I’ve seen the same underdog stories crop up in the business world.

I work for a small, Seattle-based company called Gravity Payments. We are a payment processing company, which means we help small businesses accept credit card payments. You may have heard of Gravity before because our CEO Dan Price slashed his own million-dollar salary to pay every employee a “living wage” of at least $70,000 per year. News outlets like CNN, ABC, CBS, and BBC picked up the story.

Anyway, we’re an underdog company, as are many of you who are reading this story. In the world of Amazon, Google, Facebook, Walmart, and Apple, many of us smaller players are just trying to find ways to survive.

Small businesses have been bullied for years, and unfortunately, the big players out in the market are only getting larger and more capable of bullying the little folks (i.e., all of the rest of us).

The Goliaths are taking steroids, making it even harder for David to compete.

Here’s a quick example from our business. One of my company’s competitors is a company named Cayan. Cayan started back in 1998. As a 450-person company, they were a mid-sized player in the payment processing market. But then, a bigger fish came along and swallowed them up. TSYS acquired Cayan in 2017 for $1 billion, forming a 13,000-employee superfish.

But it didn’t stop there. In 2019, a whale named Global Payments merged with TSYS in a $21.5 billion deal. The company became a global powerhouse with 24,000 employees worldwide.

Backed by stacks of cash, big companies are buying up smaller businesses to form companies of impressive size and scope. The Goliaths are taking steroids, making it even harder for David to compete.

This kind of industry consolidation is affecting small and mid-sized companies across the planet. If you run or work for a small business, you’ve probably seen the same thing happen in your industry.

How can small businesses keep up?

As an underdog, you can’t win on money. You can’t win on economies of scale. You can’t win on resources. You must win with people.

The only way for us underdogs to win is to put people at the core of everything we do. To help other small businesses and treat them better than they’ve ever been treated. To invest in employees and equip them with the necessary skills to succeed. To do things differently than the big guys.

I’m the Head of Human Resources and Learning and Development at my company, so I’m constantly trying to find new ways to help people grow — ways that we can win with people. From one underdog to another, here are five tactics we’ve found to successfully invest in people.

1. Hire people — not resumes

We have found some incredible talent in unexpected places. We have hired bartenders who became excellent sales reps, caterers who became great finance analysts, and postal carriers who became great technical deployment reps. We found these people by looking for grit, problem-solving ability, personality, and curiosity rather than just keywords on a resume.

Here are a few of the things we’ve learned in looking for great people:

• Potential > Past Experience
• Passion > Pedigree
• Industriousness > Ivy League

Someone’s resume doesn’t tell you what they can do; it tells you what they have done. We’ve decided to prioritize someone’s potential over their past experience, and it’s paid off well for us.

How to hire people — not resumes:

• Resist snap judgments. If your company uses an applicant tracking system (ATS) that automatically sorts (and denies) employees based on keywords and past experience, rethink whether that’s the best system for you. If the big players in your industry have the money and the name recognition to hire anyone they want, then maybe your competitive advantage is to find the diamonds in the rough that would normally be turned down by an ATS algorithm.
• Ask candidates about their passions and interests. You can learn a lot about someone by asking what they’re passionate about. Hearing someone talk about their passion — even something not related to work — is a great way to see what makes them tick, what makes their eyes sparkle. Look for people with deep passions who make time to act upon those passions.
• Assign job-related tasks. Give job candidates the chance to solve a real-world problem. For sales reps, that could mean asking them to do a few cold calls. For graphic designers, it may be giving them a logo design project. For support reps, it could be putting them through a role-play exercise to assist an upset client. Create an opportunity to see that person in their element; they may surprise you.

2. Empower your people to be creators — not consumers

Most employees show up at their jobs and blindly accept the environment around them: the work culture, the standard processes, the company structure, etc.

In short, most employees are implicitly trained to be consumers — passive participants of the world around them.

At our company, we want every employee to see themselves as a creator. Each person is tasked with helping create the place they want to work. Each of us co-creates the company culture, processes, and structure.

How to empower your people to be creators — not consumers:

• Talk about your company as a living, changing thing. Some companies treat their work culture as a sacred cow. Anything that could change the culture is viewed as a negative thing. We understand that mentality, but we view culture differently. We often talk about our culture in aspirational terms like “We want to be the type of company that…” Why? Because we haven’t gotten there yet, and we’ll need every employee’s continual help to get there.
• Share stories with your new hires. Tell them about the ways in which individual employees have changed the company, invented new roles, and suggested new ideas that paid off for the firm. Teach each new hire that it’s their job to improve and co-create the company’s culture.

3. Teach people how to “Be their own CEO”

We believe employee autonomy not only benefits our company but also our clients. If one of our merchants calls our customer support team with a question about a refund or payment discrepancy, we want the support rep to be able to handle the question immediately — without having to jump through hoops to get management or budgetary approval for something.

From the first day that someone joins our company, we tell them, “Be your own CEO.” We want every single person to think and act like an owner of the business.

But we’ve found that it’s not enough to empower employees. You also must equip them.

BYOCEO = Empowering Employees + Equipping Employees

In other words, it’s not enough for an employee to be given the keys to a speedy sports car. They must also be taught to drive it. So we spend a ton of time onboarding and training new employees, teaching them about how each of our departments contributes to the work we do. We want everyone to know the core drivers of our business and how everything fits together.

How to teach people how to “Be their own CEO”:

• Teach employees about the business. Employees will not be able to make wise strategic decisions unless they understand how those decisions will impact clients, other teams, and the company as a whole.
• Offer open training on leadership skills. Rather than only hosting leadership training for managers, treat every employee as a leader. At Gravity, we run a “Learning & Development University” through which we offer a new training class to employees every month. Past training has been about topics as diverse as Organization and Prioritization, Leading Meetings, Negotiation, and Giving Feedback. This training gives every employee the chance to learn how to become a stronger leader.
• Encourage employees to tackle projects outside their functional area. One of the best ways to learn about the company is to work on a cross-team project. Cross-functional projects give employees the chance to build relationships with colleagues from different teams and see the business from a new angle.

4. Plant seeds you will never harvest

Many companies view learning and development as a vehicle for creating better, faster, and more efficient employees. Their goal is to make the cogs in the machine spin faster, which yields higher revenue, lower expenses, and a fatter bottom line.

We view learning and development differently. As the Head of L&D, my job is not only to develop better employees but also to develop better people. I want them to become better leaders and communicators — not just at work but also at home. From their experiences at our company, I want people to become better brothers, sisters, friends, spouses, partners, and citizens.

Because we have a higher calling of developing people instead of just employees, we often plant seeds that we expect to never harvest. We train people on topics that aren’t related to their work — or are only peripherally related.

For example, we run a Speaker Series in which we host authors and speakers to share their interesting stories with us. Last year one of our speakers was DeRay McKesson, co-founder of the Black Lives Matter movement. McKesson’s message had nothing to do with how to process credit cards, but everything to do with how to become a better, kinder human.

We have also stocked our Seattle and Boise offices with libraries containing books about business, leadership, and personal development. Employees can check out these books at any time on the honor system and bring them back whenever they’re done. Little touches like guest speakers and libraries show employees that they’re more than just the work they do.

How to plant seeds you’ll never harvest:

• Look for new ways to invest in your employees that align with your values, culture, and the needs of your team. If your team loves TED talks, consider scheduling a weekly or monthly lunch event where you watch TED talks and discuss takeaways. If you employ a lot of readers, consider starting a company library or hosting a company book club. Initiatives like this don’t have to cost a lot of money. Our library contains a lot of books from local thrift stores and inexpensive sites like ThriftBooks.com. The point is finding creative avenues for developing your people.
• Offer diverse training opportunities. Once we realized that 1-hour classroom training didn’t work well for our outside sales team, we began sending a quick “2-Minute Tuesday” email with a short weekly sales tip. That type of information provided bite-sized info that could be consumed by our team on the road while they were on their phone or tablet.

5. Turn ladders sideways

At most companies, the only way to get paid more or progress in one’s career is to become a manager. In that type of environment, all employees — even those who don’t want to manage a team or have the right skill set for management — are incentivized to become managers.

But companies who force upward movement for growth and compensation often end up with one of two outcomes:

1. They lose great individual contributors who are unable to move “up.”
2. They create a management team that doesn’t have the skills or desire to lead.

We don’t like either of those options, so we’ve been working to turn our career ladders sideways. Rather than just moving “up” into management roles, employees often make lateral moves where they take on new responsibilities or take their skills into a different department. Then we celebrate those moves the same way we would celebrate an upward promotion.

Managers don’t necessarily make more money than all of their team members because it’s possible to make a large contribution as an individual contributor.

How to turn ladders sideways:

• Reward high-performing individual contributors. Re-evaluate compensation frequently and offer increases when your people take on big initiatives that expand their impact on the company.
• Celebrate lateral moves. Send out company-wide emails congratulating team members for changing roles and taking on new tasks.
• Change the way you talk about career growth. If you focus your 1-on-1 conversations with your team members around how they want to “move up” and “step into management,” they’ll see management as the only path to growth. Instead, ask your team members what types of challenges they want to solve and what skills they want to learn.

These five tips have helped us invest in our team and compete with the Goliaths in our industry. We have continued to grow despite recessions and industry consolidation.

We’ve found that when team members feel appreciated and empowered, they take even more pride in the company and find new ways to care for clients.

Remember, if you’re an underdog, you can’t win on money.
You can’t win on economies of scale.
You can’t win on resources.
You must win with people.

From one underdog to another, best of luck!