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Taking on the Big Guys: How a Small Company Is Competing With YouTube

People, product and passion can help you compete against a giant company in any field.
/ Source: Entrepreneur.com

It's a gutsy move to start a business in a territory dominated by a behemoth like YouTube. But New York City-based Shelby.tv co-founders Reece Pacheco and Dan Spinosa have carved out a growing niche for themselves against a seemingly insurmountable competitor. They have attracted rock star venture capitalists and mentors like Brad Feld, co-founder and mentor at super-incubator TechStars and venture capitalist Fred Wilson, co-founder of Union Square Ventures.

Pacheco shared some of his dos and don'ts for leading companies against sizeable competitors.

1. Don't obsess about what the competition is doing.
Race car drivers are told to keep their eyes on the track because if you look at the wall, you're going to crash into it, Pacheco says. Businesses with big competitors should do the same. The more attention you're paying to your competitor, the less you're paying to your company. Focus on your goals and objectives and don't obsess about what the other company is doing, he says.

2. Do build your advantage.
The weakness of many big competitors is that they don't do everything well. Pacheco says a critical part of leading your startup to success in an environment with a dominant player is to focus on your key strengths and build your company around them. In Shelby.tv's case, the social media component, which harnesses contacts' Likes and shares on Facebook, Twitter and other social media to help curate a personalized video stream leads to users spending an average of 30 to 40 minutes on the site. While YouTube has an unwieldy amount of content, Shelby.tv suggests videos you likely want to see because your friends and contacts like them.

Related: 6 Ways to Track Your Competition's Marketing Strategy

3. Do surround yourself with good people.
In addition to his power mentors, Pacheco also runs a CEO peer group with business owners in various stages. There, he shares challenges and gets support from fellow entrepreneurs. Shelby.tv hires carefully, looking for talented, committed team members, and take good care of their employees.

It can be daunting to compete with a huge company and employees worry about job security and being able to trust the company leaders. He holds meetings with his team members every six weeks. "You've got to rally your team. Be honest and say 'We're going to get through these challenges together. They trust you and they're willing to stick by you through challenges," he says.

4. Don't let fear of failure hold you back.
The current version of Shelby.tv is the second iteration of the company. The company actually shut down its operations in July 2012 to build a more social-media focused video brand. While some thought that spelled doom for the company, Pacheco and Spinosa stayed focused on the product they would want to use, themselves. And it worked: The team raised $1.5 million in funding for its first iteration, then raised an additional $2.2 million for the next round.

"You can't be afraid to scrap what you've done and do something new, especially when you're competing against a big company. Go in a new direction," he says.

Related: Dominate Your Industry: How to Become the Best in Your Field