Small Businesses Competing in an Industry Full of Giants

For small businesses, the battle against industry giants can feel like a David vs. Goliath struggle. Whether it’s digital services, retail, or consumer goods, the market is often dominated by multi-billion and even multi-trillion-dollar corporations with deep pockets, aggressive growth strategies, and economies of scale that seem impossible to match.

But history shows that disruption is always possible. The key is understanding the strategies of these giants, identifying their weaknesses, and finding new ways to compete. In this article, we’ll examine two industries – subscriptions and consumer goods – where small businesses have struggled to break through and explore how they can turn the tide.

Subscribe Or Die

In the digital economy, subscriptions have become the default business model. Giants like Netflix, Google, and Amazon have conditioned consumers to pay monthly fees for services, whether it’s streaming content, cloud storage, or productivity tools. As a user, this means failure to subscribe means the service is as good as dead – to you. But as a small business it means failure to get subscribers means your business dies.

For smaller businesses, this presents a major challenge. The subscription model benefits large corporations because they can afford to offer loss-leading deals, bundle services, and spend heavily on customer acquisition. Once they lock users in, they generate steady revenue and use it to fuel further expansion.

This creates a crowded, high-cost environment for newcomers. If you launch a subscription-based service, you’re not just competing on features – you’re competing against customer inertia. People hesitate to add “yet another” monthly fee, especially with subscription fatigue setting in.

So how do small businesses compete?

One approach is to break away from the subscription model entirely. Instead of competing directly, businesses can explore alternative structures like one-time payments, lifetime deals, or usage-based pricing. Some companies are even returning to physical ownership models, and users are increasingly re-adopting physical media such as high capacity USBs and memory cards – even rebuilding old DVD collections. Small businesses have to pick up on these trends and start feeding into them. By offering consumers more control and transparency, smaller businesses can stand out in a crowded market.

‘Big Mattress’ Boxing Out Competitors

The subscription economy isn’t the only place where large companies create high barriers to entry. A similar pattern can be seen in the mattress industry. Companies like Casper and Endy raised enormous amounts of venture capital, not to focus on profitability, but to aggressively dominate their market segment – the bed in a box.

Their strategy was simple: spend big on advertising, drive up customer acquisition costs, and establish a brand monopoly before worrying about making money. As these companies flooded the market with ad campaigns, smaller competitors found themselves priced out of digital advertising. Pay-per-click costs skyrocketed, and independent mattress makers struggled to get visibility – and when they did it was at the cost of making an actual profit.

This approach is common across industries where growth is prioritized over profit. Large companies have the financial runway to operate at a loss for years, absorbing customers and increasing their market share, while smaller players have to turn a profit quickly to survive.

Obviously the long term viability comes in with eventual decreased spending, brand awareness, and retargeting existing customers – all in the most expensive way possible.

So how do small businesses compete in a landscape like this?

One option is to avoid direct competition in high-cost marketing channels. Instead of fighting for the same ad space, smaller companies can build their brands through organic channels—social media, influencer marketing, niche communities, or strategic partnerships. Some businesses take the opposite approach and embrace local, high-touch experiences that large corporations can’t easily replicate.

Another strategy is to target customer segments that big brands overlook. Giants often focus on mass appeal, leaving room for niche players to serve highly specific audiences. Whether it’s ultra-premium products, sustainable materials, or specialized use cases, smaller companies can win by going deeper where big brands only go broad. Is there a go-to brand for a bed-in-a-box designed for campers?

Finding Your Slingshot in a Market of Giants

Both of these examples – subscriptions and the bed-in-a-box industry – show how large corporations shape industries to their advantage, making it difficult for smaller businesses to compete. But history proves that market dominance is never permanent.

After all, Blockbuster was the money maker for decades. Netflix mailing DVDs isn’t what killed off Blockbuster, but it was a way for them to compete without competing directly. But even Netflix’s innovative subscription DVD model wouldn’t live forever – but unlike Blockbuster, they pivoted at the right time.

The key for smaller players is to recognize where the giants’ weaknesses lie. Sometimes it can be adding a subscription. Others it can be getting rid of them all together. Using creative marketing approaches, or serving niche markets, small businesses can still carve out a space for themselves – even if it isn’t apparent that the space exists yet.

David didn’t beat Goliath by fighting on his terms – he used speed, precision, strategy, and faith to overcome overwhelming odds. Small businesses must do the same. Rather than trying to outspend, outsmart, or outmuscle trillion-dollar giants, they must find the gaps, exploit the weaknesses, and use their agility to strike where the giants are slowest.

Like in the battle between David and Goliath, it’s not always size that determines the winner. Double down on what you do best, be bold, hit them where they are weakest – and maybe you will go down in history as a Giant Slayer.

What is your sling? Who are the giants in your industry, and how do you plan on putting up a good fight?