Startup Guide, Part 5: Moby Dick - The Theory of Big Companies

Original author: Marc Andreessen
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Part 4

- The Fountain on the Horizon! - distributed from the mast.
- Where? The captain asks.
“Three rumba down the drain, sir.”
- Left steering! Keep it up!
“Got it, sir!”
- Hey, watchman! Now do you see him?
- Yes, yes, sir! They are there a whole herd of sperm whales! And fountains are allowed, and they jump from the water.
- As you see, give voice!
- Yes, sir. There’s a fountain! Another - another - one more!
- Is it far?
- Miles two and a half.
- Thunder and lightning! So close! Whistle everyone upstairs! "

J. Ross Brown.
" Sketches during whaling ", 1846


While working on a startup, you have to face big companies. Are you looking for partnerships, distribution opportunities, investments, do you want to organize an advertising alliance. From time to time you need to get the approval of a large company. Or the company comes to you with an offer to buy your startup. The most important thing to remember when negotiating with such a company is: you are Captain Ahab , and the big company is Moby Dick .

“And we did not spend two days swimming, when one day at dawn
we saw a great many whales and other sea monsters. Of these, one
possessed a truly gigantic size. He approached us, keeping his
mouth wide open, raising waves on the sides and foaming the sea in front of him. "

Tuk. Lucian's Translation of True Story


When Captain Ahab went in search of Moby Dick, a huge white whale, he had no idea where to look for him, whether the whale would find himself, whether the whale decided to attack the ship immediately, or first wanted to play cat and mouse, or maybe he is just busy with his giant whale girlfriend. Everything that happened depended only on Moby Dick.

And Captain Ahab could not explain to himself or to anyone else why Moby Dick did this and not otherwise. You are Captain Ahab, and the big company is Moby Dick.

Look at Captain Ahab, young man, and you will see that he has only one leg.
“What do you want to say, sir?” Has he lost his second leg due to a whale?
- Because of the whale ?! Come closer, young man; this leg was devoured, chewed, bitten by the worst of the sperm whales that had ever smashed a whaleboat into chips! ABOUT! ABOUT!

Moby Dick


Why? Because the behavior of a large company is inexplicable when viewed from the outside. I always laugh when someone says, “Microsoft will do this,” or “Google will do this,” or “Yahoo will do that.” I bet that inside the companies of Microsoft, Google or Yahoo, no one knows how exactly in a certain situation Microsoft, Google or Yahoo will behave on a certain occasion.

Maybe the CEO knows if the issue is big enough. But you, most likely, will not communicate with the CEO, so it does not matter. The insides of each large company is a very, very complex system consisting of thousands of people, of whom hundreds, and sometimes thousands, are executive directors who are confident in their ability to make decisions. On any issue, the company will vote from 8, 10, or even 20 people - and sometimes more.

When I worked at IBM in the early 90s, they had a formalized decision-making process called “alignment”. On any issue concerning in any way (even the smallest) executive directors, a meeting was convened (according to a list of about 50 people), and any of them could veto the decision in question. This, of course, is a rare case, but even in such difficult cases it is incredibly difficult to understand the decision-making process even from within the company - not to mention looking from the outside.

"*** and whale breathing often has an extremely strong odor, from which clouding of the brain can occur."

Ulloa. "South America"


In a large company, you can count on a host of conflicting forces that influence the dynamics of decision-making on any issue. The process of reaching an agreement, compromises, “service for service”, politics, rivalry, arguments, mentors, revenge for previous mistakes, territorial wars, engineering opinions, product managers, marketers, sales people, corporate marketers, financiers, HR, lawyers, channels sales, business development, strategic team, branches in other countries, investors, Wall Street analysts, industry analysts, good press reviews, bad press reviews, unknown articles that are being written right now, customers, plans for the future, not released ying plans Sales obstacles in planning for the future, partners, sales for the last quarter, the margin in this quarter, the value of shares,

You can’t even simply list all the factors that will influence the decision of a large company, let alone understand them - and it’s even more stupid to try to influence them.

“Those whales that are larger, they rarely dare to attack. Other whales are so terrifying that they are even afraid to pronounce their names in the sea and carry dung, lime, juniper and the like in the whale boats to scare them away. ”

Hugo von Troil. "Letters of Banks and Solender sailing to Iceland in 1772."


Back to Moby Dick. He can chase you for three months, then jump out of the water and make a noise and din, then disappear for six months, then come back and throw your ship aground, or vice versa - put his ass under the harpoon. And you will never know why.

A large company can study you for three months, then offer you investment, or partnership, or a purchase, then disappear for six months, then appear with a competing product that will crush you, or vice versa - buy you and enrich you. And you will never know why.

Plus, working with a large company is likely to get a ton of whale meat. Sorry, confused in metaphors. A good deal with the right company can greatly affect the success of a startup.

“And no matter what else finds itself in the chaos of the jaws of this monster, whether
it beast, ship or stone, it instantly disappears in its enormous fetid
throat and dies in the black abyss of its belly.”

Holland translation of "Moral" by Plutarch


The disadvantage of working with a large company: it can overturn you, or crush you, but most likely - make an uncomfortable deal that will restrain your development, or make you spend a lot of time in meetings and distract from the main goal.

So what to do?


Firstly , do not do startups, the success of which depends on successful transactions with large companies. Too great a risk of not making these deals, regardless of your efforts. And even if the deal is concluded, it will not work as you expected.

“Taban! Cried the senior assistant to the captain, when, turning, he
saw over the very nose of the boat the wide open mouth of a sperm whale, threatening
them with imminent death. “Taban, to whom life is dear!”

“Wharton - Death to the Whales”


Secondly , do not think that the transaction is concluded until the ink is dry, and the money does not go to your bank account. There is always the possibility that a seemingly concluded deal suddenly disappears in puffs of smoke.

At dawn, the sentinels again took up posts at the top of the masts.
- See him? Ahab shouted as soon as enough light spilled over the waves.
“Nothing, sir!”

Moby Dick


Third , be very patient. Large companies all the time play the game "faster - wait." Over the past couple of years, I have been talking with one large technology company from the east coast, which has played with me “faster - wait” at least four times. Including the time when I urgently had to fly across the country, just for lunch with the second CEO. And as a result, the deal did not take place. If you want to make a deal with a large company, it will take much longer than you expect.

“For God's sake, Mr. Chase! what happened?"
I replied: "The ship collided with a whale, and the hull was broken."

“The description of the death of the Essex whaler from Nantucket, who was attacked by a large sperm whale in the Pacific Ocean, was compiled by Owen Chase from Nantucket. Senior Assistant Captain on the said ship. ”
New York. 1821


Fourth , beware of bad deals. In my opinion, there is one promising Internet startup from San Francisco, with excellent technologies and great prospects, which at the dawn of activity made two big deals with big companies, as a result of which its wings were completely cut off and it does not have the ability to achieve its goal.

Fifth , never expect any “obvious” actions from a large company. What is obvious to you, or to another stranger, is probably not obvious from the inside of the company, after all the factors play their part.

At sixth, keep in mind that large companies are primarily interested in what other large companies are doing now - and then all kinds of startups there. Damn it, they often even more interested in the actions of other large companies than the actions of their own customers. Moby Dick was much more interested than other giant white whales, than some people in the boat.

“And suppose you even managed to harpoon a whale; imagine how
you would manage a frisky wild three-year-old with the help of only one rope
tied to the tail of his tail. ”

"Bones and rags." Chapter
Seventh Whaling

If transactions with large companies are a key part of your strategy, hire an experienced professional. Only the best and most experienced whalers had a chance to take Moby Dick. Therefore, corporate salespeople and business development managers have such high salaries. They are worth it.

- Oh Ahab! Cried Starbek, “even now, on the third day, it is not too late to stop.” Take a look! Moby Dick is not looking for a meeting with you. It's you, you're chasing him in insanity!

Moby Dick


Eighthdo not fall into obsession. Do not turn into captain Ahab. Of course, you can communicate with large companies on various topics, but always be prepared to leave the dialogue and return to your main business. For a rare startup, a deal with a large company leads to success, or a lack of deals leads to failure. (Although, take a look at the history of Microsoft and Digital Research around 1981. Here's a big whale).

And finally:

And the whale ducked under the seized hull of the ship and sailed along the shuddered keel; then, turning around under the water, he again flew to the surface, but on the other side, in the distance, and, finding himself a few yards from the boat of Ahab, froze for a while in stillness on the waves.

***

I’m swimming right towards you, oh, everything that crushes, but not all, the overcoming whale; until the last I fight with you; I strike you from the very depths of the underworld; in the name of hatred I spew out my last breath on you. Let all the coffins and all the hearse drown in one pool! already if none of them comes to me, then may I be torn to pieces, still chasing you, though chained to you, oh damn whale! So I throw the weapon!

A harpoon whistled in the air; a broken whale rushed; tench ran in the gutter with a flaming speed - and caught on. Ahab bent to set him free; he freed him; but a sliding loop managed to wrap him around his neck; and soundlessly, as the Turks crush their bow in the seragloth with a bowstring, he was carried away from the whaleboat before the team managed to clutch its captain. A moment later, a thick flare at the free end of the line flew out of the empty tub, knocked down one rower and, whipping through the water, disappeared into the bottomless abyss.

Moby Dick


Part 6

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