The Truth About Underhanded Startup Tactics

Pedro Martinez was a baseball pitcher, most notably with the Boston Red Sox. He won a World Series and was eventually inducted into the Baseball Hall of Fame.

Despite his great baseball skills, sometimes Pedro purposely hit the opponent with a hard pitch, on several occasions sending opponents to the hospital and others inciting fights between the teams. This made Martinez a hated player by his opponents.

This behavior, however, was strategic. Sometimes, it was done to intimidate the team at bat and at others to change the game's energy. Anger between the teams can fuel the best performance from the players who rally behind their teammates.

Aggressiveness

Before 2010, the startup ecosystem was much more aggressive than today. For example, when at PayPal, Reid Hoffman would call his adversary at eBay to bait him into revealing their plans. At my startup in 1998, we had a boiler room of cold callers with bonuses paid for each appointment.

Reputation

At one time, Bill Gates was intensely disliked by many in the tech industry. His aggressive tactics left many angry with him. However, this aggressiveness made Microsoft the number-one software company in the world. It is not about being liked. Instead, your company is about growing faster than your peers. When you do this correctly, some people will not like you.

Today

Most founders I talk to are not ruthless in their desire to win. Instead, they are focused on their deck, financial model, and other aspects that are drilled into them by accelerators and advisors. In contrast, the companies that outgrow their peers are focused only on the things that drive revenue.

Growth

Just as Pedro hit opponents when he could strike them out, startup founders must be willing to do what is unpopular. In the case of startups, that is aggressive sales and marketing that takes advantage of their opponent's weaknesses. That is what Microsoft did. At one time, Lotus 123 was the number one spreadsheet. However, Microsoft bundled the spreadsheet, word processor, and desktop database into a single MS Office bundle, killing the single application sales model.

Dominance

Google released its online office suite in 2006. Instead of trying to compete with the dominant MS Office, they provided it for free, which took the small business market from Microsoft. Similarly, PayPal took advantage of eBay's lack of a payment system, and even after the online auction provided one, PayPal's aggressive tactics caused it to dominate. In 2002, eBay bought PayPal for $1.5 billion.

Conclusion

To win, startups need to focus on growth at the expense of their competitors. This requires aggressive tactics that are not expected. Determine how to do this well, and you will outgrow your peers.