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Iceland show the traits of a startup in a David v Goliath situation

June 18, 2018

We’re into the 2018 World Cup, thirty-two national football teams in Russia, including Iceland, the smallest country ever to qualify, with a population of just 330,000. Every team will play a minimum of three games in the group stages before the top sixteen advances to the knockout competition.

There have been twenty World Cups since the tournament’s founding in 1930 with just eight countries sharing the victories, all either Latin American or Western European. This is not surprising given the popularity of the sport in these regions and the level of league competition that nurtures the talent pool.

On Saturday it was Argentina 1-1 Iceland: Lionel Messi missed from 12 yards as the Vikings held out in Moscow. The eighth-largest country on earth were held to a draw by the World Cup debutants. Iceland were as you’d expect; resolute, organised, brave and direct. It wasn’t complicated but it was effective enough, the onus on Argentina to make something happen, while throwing every hulking body they had in front of the ball.

The most famous of those bodies is now that of Hannes Halldorsson, the goalkeeper who guessed right and palmed away Messi’s penalty. From that moment on, another 35 minutes of backs-to-the-wall torture, Iceland held out. Finnbogason made history with Iceland’s first ever World Cup goal. Argentina had 78% possession.

Iceland caught the imagination by being a team built like the volcanic rock from whence they came, fully-formed as they emerged from the magma. Their football was unfussy, they fought hard. It doesn’t always win games but it rarely fails to win hearts and minds to see a small nation, disadvantaged against far greater adversaries, punch above their weight.

Most tournaments produce a surprise and trauma for the big teams – Iceland beating Portugal and England at the 2016 European Championships – which shows that population and money are not the only ingredients for success.  Iceland is punching way above its weight on the international football stage and has already defied the odds just by being in Russia.

Manager Heimir Hallgrimsson has shown that it is possible to rise up from humble beginnings to achieve a truly audacious dream. The chasm between the haves and have-nots is not too wide to cross with the right strategy and mindset. Underdogs can still win, as they always have won, by committing to overcoming adversity and pursuing a goal with passion, courage, grit and humility. These traits have defined the underdog’s journey since time began, and will continue to pave the path for every dreamer.

Entrepreneurs perpetually play the role of David against established Goliath firms, and, just like their biblical counterpart, defeat their larger entity by outwitting, outmaneuvering, and out-imagining them. The business lesson is this: when underdogs choose not to play by Goliath’s rules, they win. Don’t think of a plucky underdog that got lucky, rather Instead, think of a confident, determined competitor who is more than happy to be underestimated, and used it’s own unique capabilities to win.

The story of David and Goliath is a tale of how a little shepherd boy defeated a famous fully armed giant warrior. I often use this story as a source of inspiration for startups to give them insight and belief as how they can overcome the odds against larger rivals.

David’s victory over Goliath, in the Old Testament is the battle between the Israelites and the Philistines. Twice a day for 40 days, Goliath, the champion of the Philistines, challenged the Israelites to send out a champion of their own to decide the outcome in single combat. But Saul and the Israelites were afraid.

David hears that Saul has promised to reward any man who defeats Goliath, and accepts the challenge. Saul reluctantly agrees and offers his amour; David declines, dressed in his simple tunic, carrying his shepherd’s staff, sling, and a pouch of five stones. David and Goliath confront each other.

The giant cursed him, hurling threats and insults. Goliath with his armour and shield, David with his staff and sling. David hurls a stone from his sling with all his might, and hits Goliath in the centre of his forehead. Goliath falls on his face to the ground, and David cuts off his head.

Like David, entrepreneurs are perfectly positioned to operate as insurgents because they’re more willing to take risks, more alert and agile, and challenge the conventions about how commercial battles are fought.

So what’s the strategic mindset of a ‘David’ as a startup?  Take a look at the story again. The lesson isn’t simply that when a powerful competitor takes on a smaller one, the smaller one might win by chance. Sometimes the key to success is obscured by our own misconceptions. See the situation more clearly from David’s vantage point, what can he use to his advantage? Don’t take the battle on their terms, create the conditions where you have an unfair advantage on your terms, reframe the debate.

But look at the research. The political scientist Ivan Arreguín-Toft researched every war fought in the past 200 years between strong and weak combatants. The Goliaths, he found, won in 71.5% of the cases. That is a remarkable fact, especially when the result is in the context of the sample of conflicts analysed was where one side was at least ten times as powerful in terms of armed might and population as its opponent – even in those lopsided contests the underdog won almost a third of the time.

What happened? Simply, the underdogs acknowledged their weakness and chose an unconventional strategy. In those cases, David’s winning percentage went from 28.5% to 63.6%. When underdogs choose not to play by Goliath’s rules, they win, Arreguín-Toft concluded.

So how can the entrepreneurial ‘Davids’ succeed against their Goliath adversaries?

1. Self-belief Before confronting Goliath, David had faith that Goliath could be defeated. Faith is simply the ability to act despite tremendous doubt. As an entrepreneur, you must never see your competitors as infallible. You must see a possibility to out perform them. With this mind-set, success will be yours.

In David and Goliath the Israelites had faith that Goliath will someday be defeated but none had self-belief. David not only had faith that Goliath could be defeated, he also had the self-belief that he was the one to do it. As an entrepreneur, you must believe you can do it.

2. Leverage Give me a lever and a place to stand and I will move the earth, said Archimedes. Leverage is simply the ability to do more with less, and ask yourself: how can I compete favourably with fewer resources?

David acknowledged that Goliath was taller and stronger than he was, so he asked the question; how can I defeat Goliath without engaging him in a hand-to-hand combat? That answer came in the form of leverage. That leverage was his sling, and his speed.

The weapons of both had the potential to kill but the difference emerged in their speed. David’s sling was lighter and smaller, it had the ability to reach its target faster than that of Goliath. How fast is your plan and how fast is your strategy?

3. Agility David’s strategy and tactics surprised Goliath, he wasn’t expecting to be confronted by such an opponent. David’s agility outwitted and outsmarted Goliath’s ego and complacency. He wanted it more, and made it happen for himself.

In business, you must develop a smart strategy to help you achieve your aim. David’s strategy was to subdue Goliath with minimal effort. He employed the following agile thinking and tactics:

·     He picked just five stones

·     He avoided engaging Goliath in a hand to hand combat

·     He exploited Goliath’s ego and over confidence

·     He aimed at achieving his goal with the first shot

·     He took Goliath by surprise and caught him off guard

4. Play to your strengths Big firms’ perceived advantages can often mask their even bigger disadvantages. David is a shepherd boy, and refuses to wear armour. Why? Because he realises that heavy armour will weigh him down. Goliath could easily kill David with his sword, but only if David were foolish enough to walk right up to Goliath. Of course, that’s the last thing David plans to do.

The misconception is that David goes into battle with only a sling. But it’s a highly effective weapon David has used many times to protect his flocks from wild animals. He’s not going to fight Goliath in hand-to-hand combat, he’s using his experience and expertise to fight on his own terms,  Goliath can’t counter this. When David lines up, he has every intention and every expectation of being able to hit Goliath at his most vulnerable spot between his eyes.

That’s exactly what David did, walks right up to Goliath (but still far enough away that Goliath’s swords and javelin are useless) and kills Goliath with a single shot to the head. Recall, the scene in Indiana Jones shoots the intimidating Arab swordsman in Raiders of the Lost Ark – he made the most of the moment on his own terms.

5. Focus on the moment in front of you Large companies suffer when they lose touch with the basics, they focus on scale and become complacent and lazy about their approach to customers, believing their brand will keep customers. Often they’re not close enough to customers, a distant manager adjusts pricing numbers on a spreadsheet, but customers react and in a click of decimal points, they switch to a rival.

The value of an individual customer is always greater for small businesses than for large corporations, and you can create intimacy. Make each customer feel they are your only customer, and the only thing that matters in that moment.

Small businesses can feel their own pulse, sensing the stream of day-to-day reactions as they happen and respond accordingly. This high level of sensitivity is unique to small businesses. The pulse gives you a sixth sense, an intuition for what needs to be done, and how to retain your customers.

David and Goliath is a metaphor for improbable victories, but when you consider that David was fighting on his terms, you realise Goliath is a sitting duck. He didn’t have a chance. The parallel in business is that it’s not about company size or budget, it’s about what you do, and how you do it. Startups aim to overpower the juggernauts of their industry, yet many fall into a trap of one-upping the competition and focusing on features, instead of understanding what their customers want and need, and doing it better than their larger, established counterparts. Perhaps Airbnb is the best example of this.

So instead of wishing you had the resources and scale of bigger competitors, and get downhearted at their scale, focus on how you can be nimbler by knowing your customers better and solving their problems faster. Stay focused on the distinctive way you can delight customers. For example, the rental car market is filled with companies offering daily rentals, but Zipcar discovered that customers wanted to rent a car by the hour. Zipcar saw an opportunity to delight customers and created a distinctive service as a result.

Equally Zappos, the online shoe company, is David compared to counterpart Amazon. How do they compete? Zappos has a 365-day return policy compared to Amazon’s 30-days. In addition to creating happy customers, this policy shift also led Zappos to discover that customers with the highest return rates were also the most profitable for the company.

While many aspire to be Goliaths, instead embrace the advantages of being an underdog. As you grow and put your best foot forward, don’t forget the foundations that made your startup strong.

Despite their own stuttering starts, most oddsmakers will tell you Brazil or Germany are favourites to win the World Cup. But only one nation stands as favourites to win my heart: Iceland. They know they aren’t going to out-play their more talented, more skilful opponents, they don’t have much in the way of household names, but make up for this in grit, tenacity and facial hair. They play to their own strengths, and the bigger ‘better’ teams can’t match them.

So if you want to support a Goliath, go cheer for Brazil or Germany. If you want to stand and root for the underdog, go boom-boom-CLAP with Iceland, and watch them deploy the tactics of David. Gangi þér vel, Johann Berg Gudmundsson!

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