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Lessons from Small IT Businesses Challenging Giants

Lessons from Small IT Businesses Challenging Giants

One small tech organization is challenging Google Maps. Here's what you can learn from it about IT liability and small business strategy.

Thursday, July 17, 2014/Categories: errors-and-omissions

NPR reports on how a tech non-profit that relies on volunteers is taking aim at one of Google's strongest markets: maps.

In addition to helping you search for Thai food locations, Google actually sells its mapping data to companies. OpenStreetMap is trying to offer an open-source alternative to Google Maps. Volunteers in different cities log information about their neighborhoods and upload it to the site. The idea is to build an open-source resource of geographic data that companies can use for free and without restrictions.

One thing should strike you about OpenStreetMap's plan: it's ambitious. Wildly ambitious. Though the company doesn't have the billion-dollar budget of Google, it's trying to find new ways to compete.

There's an important lesson here. You might not be able to compete dollar for dollar with the big tech companies, but successful small businesses often are able to find a niche, offering a slightly different service at a different scale or price point that will attract customers.

Small Business Tips: Your Road to Success Might Be Off the Map

Successful IT consultants and developers are able to adapt and find markets that they can be successful in. Often, you'll end up doing something completely different than what you thought your business would do. Small-business owners can look to these two examples:

  • Nokia, though not a small business, has also found a way to challenge Google Map's dominance. After being pushed out of the mobile phone market by smartphones, Nokia refocused its business on map technology, employed a fleet of cars equipped with street cameras, and now competes directly with Google by selling mapping data to Microsoft, Amazon, and Yahoo. Flexibility is key. Independent contractors and consultants have to be ready to shift their focus to new areas of IT, network security, and software development. (For more business tips, see "What Amazon's Smartphone Can Teach Us about Sales.")
  • Pixar provides the classic example of an IT company that was able to do just that. The animation studio actually began as a specialty computer company that made high-end computers. What did that have to do with computer animation? Well, the company made computer-animated movies to show off what its hardware could do. Eventually (with some direction from Steve Jobs), it focused solely on making movies. That turned out pretty well for Pixar.

The lesson here is that the course of IT small businesses never runs smoothly. As a startup or IT consultant, you should remember that what you do today might not be what you do tomorrow. But by being flexible and willing to rethink the whole focus of their businesses, many IT small-business owners are able to find success and even compete with some of the industry's biggest names.

Insurance for Changing Markets: How Technology Errors and Omissions Covers Small Businesses

Let's say you start off your company as a business intelligence consultancy firm. You love big data. You are the data whisperer. Analyzing marketing and sales data for demographic trends makes you so excited you can't sleep at night. But there's a problem…

Most of your small business clients aren't into big data. It's too big for them. They need small scale IT solutions for their business. They'd like to have gigs of data they can analyze, but many of them don't have IT solutions that allow them to track their sales stats.

A flexible, innovative small-business owner sees this as an opportunity. Though it's not what you want to do, you should take advantage of this market and offer smaller IT services for these clients. For example, you could start selling SaaS software to handle their sales records or specialize in data migration to help businesses upgrade to IT that better manages their data.

Though it's not a perfect fit for your expertise, if you're flexible you can find your niche. The good news for IT consultants is that Technology Errors and Omissions Insurance can adapt as they change their IT services.

If you rethink your business and completely shift your focus, your Errors and Omissions Insurance policy can cover both your old liabilities (from old contracts) and new ones in new markets.

That's why it's important to have E&O Insurance in place in the early stages of your company. This policy only covers lawsuits over the work you did while you had coverage. If you're sued over a contract that you finished before you had E&O, your policy won't cover you. It only covers contracts you sign after to you begin coverage.

Anytime you change your business's focus, you should consult with your insurance agent. Having an agent that specializes in IT insurance ensures that you're getting adequate coverage for cyber liability, data security, software risk, and other IT liabilities.

For a free insurance quote on Technology Insurance, fill out an online insurance application.

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