A Note to Start-Ups From the Obama Playbook

If, when the Democratic primary season began over a year ago, Barack Obama were a business, he would have been a cool Internet start-up: unknown and under-funded, but with a killer app that made the management team believe it was potentially on to something special.

And if Hillary Clinton were a business, she would have been Wal-Mart (WMT), or Coca-Cola (KO), or some other ginormous, well-known institutional brand. With reason to be confident and the resources to blow away any competitor, brand Hillary was seemingly the safe bet.

So how did the plucky little start-up beat big, bad Wal-Mart? The same way any small business beats a big-box competitor -- by playing to your own strength and not theirs.

The Obama lesson is truly one from which any small business can and should learn:

• Why did team Obama go after small donors? Not because it seemed like a great, grand strategy (though that is what it turned out to be) but because that was all they could do. The Clintons locked up the big $2,300 donors early on.
• Why did Obama focus on the caucus states? Because, among other reasons, Hillary practically ignored them. The Obama campaign saw an opportunity.

I could go on, but you get the idea. You beat the big guys by finding their vulnerabilities, exploiting them, and in the process, tapping into what you do best.

If you own a small hardware store, and Home Depot (HD) is moving in down the street, the thing you will quickly realize is that you will never beat them on price, so don't even try.

But just as quickly, you will see that beating them on, say, customer service, should be like shooting fish in a barrel. I don't know about you, but the last time I was in a Home Depot, finding someone to answer a question was almost as difficult as finding the product I needed.