This is Part Four of a five-Part series: Joy of Honesty in Business

Tiny startups will always have shortcomings compared to the big boys.

Three people can’t run 24/7 tech support. A single consultant cannot always answer the phone. Software might have more bugs and fewer features than the competition.

Your customers know it, and you get to hear about it: 

• “I’m not comfortable buying from a small company; what if six months from now you go out of business?”

• “What if I have a problem on Saturday?”

• “I tried calling you but got an answering machine — on a Thursday!”

Do you try to hide these shortcomings, or do you turn it into an advantage?

In my experience you can’t hide. Oh, you can try, and boy have I gone down that road, carefully selecting my words so that I’m not lying per se but still hiding the fact that I was a one-man software shop: 

• “We have hundreds of users.”  Well, hundreds of human users, but not hundreds of customers. And who is this “we?”

• “I’m going to personally handle this issue.”  Well, yeah, I don’t see anyone else here.”

• “Yup, I always answer the phone.”  Does voice mail count as an employee?

The fact is, after a few interactions — whether by phone or email — they realize it’s just you. I know you think your Web site looks impressively big-company considering you designed it yourself, but they’re rarely fooled. I know you’re proud of v1.0 of your software — and congrats on that by the way — but your customers are still putting up with all sorts of issues.

What I discovered at Smart Bear is that shortcomings can be converted into competitive advantages.

Here’s some examples:  

• Problem:  You’re a one-woman consulting company. What happens if you’re not available? A big firm has extra people in case of emergency.

• Advantage:  With my company, you always get me; at a big firm, you get whomever isn’t busy, and the good people are always busy. If you wanted someone like me at a big firm, you’d pay double (firm overhead!), and you still wouldn’t get my undivided attention.

• Problem:  You don’t have 24/7 tech support.

• Advantage:  Because we’re small, “tech support” means “talking directly to the developers who make the software. ” No “level 1″ layer whose true purpose is to block you. You get deep answers from the creators. Bug reports and even your feature requests go straight to the ears of those who can do something about it. Now that’s customer service!

• Problem:  This software is obviously new. It has bugs, and it doesn’t have all the features we want.

• Advantage:  All software has bugs, but we’re small enough that bug fixes are often turned around in under 24 hours. Also, we can afford to implement little pet features you have — in fact, you can even help us design the next version. Good luck getting this kind of responsiveness with a six-year-old product at a big company. (And don’t tell me those other products have no bugs!)

• Problem:  You’re just a small company. How do I know you’re going to be here in 12 months?

• Advantage:  How do you know big companies will be supporting their products in 12 months? Big companies are cutting products all the time. They have to, if the product line isn’t profitable. With us, all we do is work on this product. It’s our life. Every waking hour is spent improving it and making you happy. Which of these strategies sounds more likely to survive?

The trick in each case is two-fold:

• Dispel the notion that “big companies” don’t have similar problems.

• Trump up the advantages you have because you’re a small business.

Sometimes you can’t win on No. 1. For example, if they have 24/7 tech support while you have 8/5, you’re not going to win on hours alone. But for every disadvantage there’s a counterpart advantage; here you would point out that talking to the company’s CEO on Monday is far more valuable than getting canned responses from “level 1 support” on Sunday.

Part No. 2 is easy. Embrace what you have rather than compete with the big guys on their own turf. Small businesses always have advantages over big companies — passion, responsiveness, expertise, transparency, inclusiveness, and personality.

One final note, though: These explanations have to be honest. If you don’t have 24/7 tech support, your 8/5 support must be stellar.

It’s not “spin” if it’s the truth.

Do you have other stories or ideas for how to turn shortcomings into advantages? Join the conversation and leave a comment!

This post originally was published Feb.2, 2009, on Jason Cohen’s blog, “a smart bear.”  Check there to see comments and more tips from his readers!

• a smart bear
• advantages
• honesty
• Jason Cohen
• small business