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August 15, 2023
November 15, 2021

SMB CEO Mindset

At AbilityMatrix we are known for seeing trends earlier, sometimes way earlier than they go large and become obvious for the mainstream. This simply comes with the terrain: we work with innovators, either at small companies or at larger enterprises. We consider ourselves fortunate enough to have access to the thought process of both worlds and know their private opinions on trending topics or on what they see as emerging problems. Without sharing confidential topics from these discussions, here's the information that we think can be most helpful when thinking about timeframes and problems an SMB CEO should think about.

Considerations briefly:

  1. Public opinion is shaped by enterprises.
  2. Public services and non-profit opinions are also shaped by large enterprises.
  3. Your perception of problems is defined by the above.
  4. The people you have access to are not C-level thought leaders, but managers.
  5. Managers do not think long-term. (and some C level executives share the same habit)

In detail:

  1. The discussions, keynotes, and generally the conversations on social media are defined by the companies with the biggest budgets. Quite often the keynote at any conference is reserved for sponsors. Their agenda will be the headliner, no matter the current relevance. Their marketing budget and therefore marketing impact is several magnitudes larger than any SMB or any alliance SMBs can create. Also, multinational companies have a large network of evangelists that shape decision-makers and public opinions.
  2. Public decision-makers who attend events organized by these enterprises and non-profits have either a department solely for top-tier companies or the whole agenda of the non-profit is defined by the interest of key stakeholders in the market. Again, money talks, and for public service decision-makers it is just natural to go with the safest bet, and that would be the industry trend or modus operandi preferred by the largest vendors. They do not have the time, or the risk-taking mandate to opt for smaller companies when anticipating the future.
  3. What you see as reality is highly influenced by what you experience, day in, day out. Points 1 and 2, if executed consequently, will mean that everyone will eventually believe that this is the future, even if their personal everyday experience is different. Enough marketing help readjusts what they see and reframe their own experiences.
  4. Most SMB companies are problem solvers and not trendsetters - even if they have the innovation capability to do that, and are in a seemingly disruptive area. People tasked with problem-solving at large enterprises are usually subordinates of people who are figuring out strategies or trying to understand trends. These subordinates just do not have the freedom to change those agendas set by the conferences and marketing executed by enterprises.

As a result, you will always have to work with the long tail of Tier 1 vendors and you will always have to adjust to your customer. Even if you are innovative, chances are high that your vision will not align with the clients’ vision, even though you might be right.

One particular example:

We started advocating for product-led companies 1.5 years ago

  • Because we realized that you, at smaller IT companies cannot keep the developers doing outsourcing jobs, the fluctuation will be high.
  • That will be happening because everyone is your competition when it comes to hiring developers - companies with deep pockets (banks) or companies where the sheer survival is about hiring developers (eg, car manufacturing companies) or companies with just more exciting projects than you. A crazy unbalanced demand-supply status.
  • As an additional trend, price arbitrage is getting more and more exploited by enterprises: Morgan Stanley building coding headquarters in CEE, other US companies following suit and paying double or triple the price of current local salaries and still making a hefty margin but costing you your developers.
  • We've explained this to our partners 1.5 years ago, and now they see; still the trends, keynote speeches are still not about how SMEs should be product-led, as the largest players either do not experience this, or it is not in their interest to see this shift happening (they will have a hard time poaching developers)

Other examples where corporate communication was defining the trend, but they were unable to change customers’ minds

3D TV:

How ARM will never dominate servers
Starting in 2014, and some change happening 7 years later but the battle is still on full steam.

Today the ARM server market share is still insignificant, but on a potentially disruptive track as we already covered it in 2020. Read more here: PART 2 - The Disruptive Story of ARM - AbilityMatrix

Okay. So what to do about it?

As a result, you either follow suit because the market is not driven by you, or if it is affecting you directly (practically causing a blind spot), you try to create a supportive network to help you spot your blind spots.

Here are some suggestions for each:

Follow suit tactics and understand the trend before it happens
  • Hire supporting staff of enterprise CEOs - advisors, chief of staff, etc. They know the internal agenda, and as the speed of change of these organizations is slow, you can prepare with some insights from the boardroom.
  • Look at books they read, events they attend. Look at what authors will become keynote speakers at key conferences. Those will be the most interesting topics, independent of relevance or being the best possible idea.
  • Network with Enterprise CEOs - startup events, charities. There is plenty of opportunities to build your CEO network. Charities or other “pay it forward” type events. During the small talks, you can discuss trends, books and see what forms their mindset. It will help you be realistic about what to expect from them.
Spotting and fighting the blindspot problem
  • Mastermind groups: create your own professional bubble
  • Try to talk to your peers. Not necessarily direct competitors, but companies of the same size, from different walks of life. Being in the same group helps amplify the experiences that you see and all of you find relevant. Patterns will emerge and trends will be easier to spot.
  • Networking with peers: In addition to more widespread social media, we like Lunchclub with its professionally matching algorithm, and without the intention to learn about markets and trends, we have easy access to some of the best markets through the lens of different size companies.

Agree, disagree? Let us know. And in case you want to pivot your bespoke development shop into a product-led cash machine, definitely book a call with us!