Rules of Technology: Small Companies Often Beat the Big Ones

A man presenting a chart to his team

By Bob Wise, President

In direct contrast to the so called “Law of the Jungle”, where size rules the day, Stanford Graduate School of Business lecturer and entrepreneurship expert Mark Leslie recently published what he calls “Leslie’s Law”, proving that in the tech sector “small fish (almost always) eat big fish”. Leslie’s theory follows the relentless upmarket trajectory of start-ups and new technologies that erode market share from larger competitors until the “behemoths of the sector are forced to retreat back into a narrowing market niche.”

After several years reading story after story about “Disruptive Innovation”, I find myself wondering why Leslie’s views aren’t receiving as much attention as Christensen’s disruption theories. While both ideas look at innovations that take root at the bottom of a market and move upward, Leslie’s Law doesn’t require creation of an entirely new value chain or the complete destruction of existing models. His theory focuses on bringing unique value to new markets and provides a three-step road map for start-ups that want to grow their companies and take on big, well-funded competitors.

  1. Create Something Uniquely Valuable for a Large, Underserved Market Focus on providing a low-friction, high-fit product to a large market that previously didn’t have access due to cost or complexity in delivery.
  2. Migrate Upward by Adding New Features and Functionality As the needs of your leading-edge customers evolve, expand alongside them with investments in innovative new features and functionality.
  3. Use Your Lower-Cost Structure to Steal High-End Market Share In what Leslie calls “the age of unbundling” start-ups can effectively compete by focusing on doing one thing better and more efficiently.

“Right now, we’re seeing the proliferation of small, lean and mean players poised to attack the big to mid-size players above them,” Leslie says. As the president of a lean and mean telecommunications provider now infiltrating the enterprise market, I couldn’t agree more. has blazed a successful trail along its own “road map” to market dominance and is now set to reap the rewards while some companies at the top start to wonder what happened.

First, pioneered unlimited free global access to high-quality audio conferencing for everyone. At the time, conferencing was a service provided only to top executives at large corporations due to the cost of delivery. The company then invested in building its own telecommunications network and expanded its offerings into state-of-the-art screen sharing, online conferencing, mobile applications and video conferencing services.

Today, the company has millions of global customers including individual users inside many of the Fortune 500. We recently launched For Business and are now offering the same highly-reliable, secure and easy-to-use conferencing and collaboration services to big enterprise customers at up to 80 percent less than they are paying today.

Need more examples? Think of the growth model followed by That company took the CRM market from highly complex, on-site installations that required tons of training to a hassle-free, web-based solution delivered to more companies at a fraction of the cost. Other examples include a host of cloud-based document storage and sharing solutions like Dropbox or companies like Nest taking on the smart home market once owned by Honeywell.

Whether these examples are disruptive innovation or Leslie’s Law at work, these kinds of market changes are always positive for end-user customers even if they aren’t big wins for the big companies that were used to serving them. As Leslie suggests, “You should always keep one eye looking behind you so that you can see the next young company that wants to eat up your market share someday.” Good advice and a suggestion we intend to follow.

Bob Wise, is President of, where he focuses on creating a team-focused, positive culture, building customer relationships and devising innovative strategies to drive revenue. Wise was instrumental in the recent launch of for Business. For more information,

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