242. Big Tech vs Little Tech: What Non-Technical Leaders Need to Know

What’s good for Big Tech isn’t always good for Little Tech, and vice versa.

In this episode, we’re breaking down the key differences between these two worlds and what they mean for you.

Listen to learn: 

• Which Big Tech lessons don't apply in Little Tech and vice versa.

• The unique advantages (and pitfalls) of working in Big Tech vs Little Tech.

• How to position yourself (or your company) for success in either world.

• What the future holds for Big Tech, Little Tech, and the leaders who bridge the gap.

Whether you're planning your next career move, building a business or investing in tech, this episode is for you.

Timestamps

00:00 Introduction

00:36 Understanding Big Tech vs. Little Tech

06:12 Key Differences in Strategies and Mindsets

11:54 Navigating Career Choices in Tech

15:35 Platform Dependency Risks

20:05 Risks and Opportunities for Founders

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Transcript

Sophia Matveeva (00:00.182)
What's good for Big Tech is not necessarily good for Little Tech. And in this lesson, I'll break down the key differences between these two different worlds and how they impact your career decisions and what non-technical leaders and founders need to consider while navigating in this tech landscape. So whether you're planning your next career move or you're building a startup, this lesson is going to help you make a smarter

more educated and informed decisions. Hello, smart people. How are you today? In this lesson, we're going to talk about big tech and little tech. And, you know, people often talk about the tech sector, like it's this, you know, united thing, but in reality, come on, what's good for Mark Zuckerberg is not going to be the same thing that's good for, you know, a founder with like two people working for them. So when you hear about

when you hear people talk about the tech sector, just think about which perspective they're coming from. And a lot of the time they're only coming from the big tech perspective, which really misses out on a lot of really interesting companies and a lot of really interesting innovators. But first of all, let's talk about the definition because you've probably heard big tech a lot, but have you even heard or thought about little tech? So let's begin with this definition.

Little Tech is not just everybody who's not Big Tech, but it's also not just everybody who is, you know, an early stage startup in their kitchen. So here are the characteristics of Little Tech. So first of all, they have an innovators mindset. They're building new solutions and trying new things rather than only maintaining a market position. And they're independent. So they're making decisions based on where the market's going, based on customer needs.

and not defending their existing market position. They are really strategic about their resources. So basically that means they don't have loads of money to throw around. So that means they have to kind of watch the cash flow, which big tech really doesn't. And they are very focused on disrupting incumbents on creating new markets. So they're innovators, they are creating new market opportunities for themselves.

Sophia Matveeva (02:23.263)
and they could be bootstrapped or they could be venture backed. so examples are pre-seed startups, so very early startups, but also scale-ups like Notion or like Figma was before it was acquired, but also public companies that are still in high growth mode like Snowflake. They're all in this little tech. mean, of course, Snowflake is different in size to a super early stage startup.

but they probably have more similarities to each other than they do to say Amazon. So what's not little tech, small tech consultancies, lifestyle businesses and traditional software companies with stable Greg or just tech enabled traditional businesses. You know, your coffee might have your coffee shop rather might have an app, but that does not make them into a tech business. Okay.

What I noticed, I really noticed this difference between Big Tech and Little Tech recently when the whole DeepSeek thing came out. So when DeepSeek first came out, Big Tech valuations, not valuations, market valuations, so basically their share prices, they dropped, Nvidia dropped. And what did Little Tech do? Well, Little Tech was absolutely excited. And so I know a lot of founders of

you know, tiny companies and, you know, just scale ups as well. And people on that side of the market were really excited because, you know, they are not building their own LLMs. So the idea of having something open source and something 44 times cheaper than OpenAI's version, well, that really excited little tech because it opened opportunities up to them, right? Whereas big tech was like, you know, this is going to disrupt the stuff that we're building. So that was

my most recent example of how the two worlds really look at things very differently. And so when you are thinking about these two, you might think, well, I only want to be a big tech executive or only want to be a founder. Why am I going to care about the side that I'm not? Well, I would say to you that that is unwise. is why is it to think like a venture capitalist in this particular case?

Sophia Matveeva (04:46.273)
Because VCs, know, smart VCs, they think about the entire perspective. So venture capitalists invest in little tech because that's how they make their money. They make their money by investing in relatively early stage startups. So some invest in pre-seed, some invest in series D, but that is still very early stage compared to the public market. So VCs look at little tech. That's where they make their money. But often they sell to big tech.

So, you know, they would fund a little tech company that would then be acquired by say, Metta. Also, venture capitalists did actually fund the big tech companies. That's how they became big tech companies in the first place. So for example, Andreessen Horowitz, known as A16Z these days, they invested in big tech. So they invested in Facebook, but they are also investing in AI startups that are challenging big tech. So,

And in general, you know, kind of thinking like a venture capitalist about how you allocate your resources is really useful because even if you have absolutely no money, your time and energy are very, very precious resources. And so you need to think about how you're allocating them. But that's a whole other represent anyway. So VCs think about big tech and little tech and so should you. The first lesson that I want you to learn is that you should not apply big tech lessons to little tech and vice versa because

Most of the time they are fundamentally different beasts. So here are some big tech lessons that fail in little tech. Build everything in in-house. So, know, I'm assuming that Meta probably has their own CRM. It would make sense for them, right? But if you're running a tiny startup, just use Salesforce or Airtable. If you're going to build your own do-it-on Airtable, which is kind of pre-built for you.

Another lesson that doesn't work in little tech but works really well in big tech. Perfect before launch. So if a startup is going to spend a year or even six months on building a great product, then, you know, their competitors might capture the market or, you know, they just might run out of money. And the thing is, it is more important for big tech to do that because they do have brands, but even they they move relatively fast, but

Sophia Matveeva (07:10.605)
Small tech, little tech, basically has to move faster. Another thing that big tech has to do these days because of regulation is they have heavy processes. you know, even actually forget regulation. Let's just talk about HR where everybody understands what that is. So if there's a five person startup and they're implementing Google's performance review system, that's just not going to make sense. That's just going to be really, really silly.

And you know, I actually remember in my first startup and you know, when at our biggest were like 12 people. So definitely little tech. Somebody said to me, you need to have a head of strategy. I'm like of 12 people. You know, this person was a really senior board member in a very big company. And there it makes sense to have a whole strategy department stuffed full of MBAs in a 12 person startup. does not.

So this is another lesson that if you're running a small tech company and you've got people coming from big companies, whether it's big tech or something else, they might have really good advice for other big companies, but you're not a big company. So implementing some big company advice might actually kill you, but it also works the other way around. So what are some little tech lessons that fail in big tech? So one of them is move fast and break things. Remember?

That used to be Facebook's motto, but then that got them into a lot of trouble. So now they basically become move fast and break things, I think, with sustainable architecture. Basically something not as memorable. Anyway, the point is if you are running a big bank and you're going through digital transformation, you can't have the same downtime tolerance as, for example, Stripe.

Also, continuing with the banking example, another thing that Big Tech can't do is that they can't really have informal compliance. So for example, Revolut or Monzo, they could launch features quickly. Well, they could have done in their early days. It's more difficult for them now, but especially somebody like JP Morgan, they need extensive compliance reviews before any product change because basically,

Sophia Matveeva (09:33.825)
because of their systemic importance to economies. And so they have super strict regulatory oversight. So yes, they want to move fast, but they also have these constraints and these constraints, well, they have to be respected because basically it's illegal not to in that series. Another thing that doesn't work in big tech that does work in little tech is that the kind of generous approach. So one of the

thing is that some people, including me, love about small companies is that you get to try all sorts of different things. know, one day you're ahead of strategy, tomorrow you're ahead of sales, tomorrow then you're ahead of marketing and so on and so forth. And this is interesting and this really appeals to some people. To other people, it really doesn't. And if it doesn't appeal to you, then you should definitely work at a big tech company. But if you look at Facebook's early days,

they had this everyone codes culture, which just doesn't, you know, just wouldn't work today. And so the more big the company is, whether it's big tech or big oil or whatever, the more specialized roles you are going to have. So this generous approach just is not going to work for them. Okay. So, so far I've talked about these two differences. Now for the

people who are thinking about changing careers. What's kind of what's obvious, I think about big tech is that they pay a lot of money. So, you know, you are if you're going to work in a big tech company, you're going to have pretty good benefits and you're probably going to get paid really well. You could potentially get paid really well working in little tech, but the risks are higher because, you know, if you're one of the early stage employees of a company that gets acquired, yes, you do very well. But if you're not,

That's not going to happen. again, costs and benefits. What do you want? What's your risk profile? And also kind of where are you in life? Do you have lots of people depending on you? If you do that, maybe Big Tech is going to be better than Little Tech. But also if you completely hate that kind of stability and you want to be a generalist, maybe it's worth taking the risk. That's obviously up to you. Okay. So I don't want to dwell too much on Big Tech versus Little Tech for

Sophia Matveeva (11:55.213)
um, career choices, because I think we've kind of covered that as, you know, I think it's pretty obvious in big companies that you are going to be much more likely to be an asylum, but you have stability in small companies. You have a lot more room for innovation and room for growth, but also there's a lot of risk. Okay. So that's done. Now I want to talk to the founders here. Now this is serious. You are the small tech people and you might be dreaming of being acquired by a big tech company.

Yes, that can happen, but also big tech companies, you know, I'm going to be polite, they're not angels, right? So they can actually use all sorts of sneaky tactics, which are potentially going to kill your business. So for example, there is a trap where they basically say that they are interested in acquiring your company, and then they go through lots of talks, they go through lots of due diligence, they really find out what you're building and

They basically create a copy. this, a great example is Instagram stories after Snapchat. So Snapchat acquisition talks failed and what happened next? We all know, okay, Instagram comes out with its own story feature. So Snapchat, you know, they're still okay. They're still around, right? But it was

really demoralizing. It's really unpleasant to see your time is wasted and you definitely feel like you've been lied to. Were they lied to? Did Facebook plan to do this all along or not? We don't know. But these kinds of things were essentially a company is getting to know you, they're getting to know your product, they're getting to know your strategy. If you don't agree on the price, well, they've had enough time to understand the market and build their own. That does happen. So be careful of this.

Another thing that happens that big tech does to little tech are false partnership promises. And I think a really good example of that is Amazon. So Amazon studies seller data on their own platform and then launches competing products. I mean, we all know this and people still sell on Amazon because it's basically it's got so much, so many consumers, but it is a risk. a common timeline would be, you know, for these kind of

Sophia Matveeva (14:18.871)
Fake partnerships would be month one, exciting initial meetings, yay. Then months two and three, you'll have lots of department presentations where you, little tech, you go and you present your strategy, you present your product, you talk about your features, all the stuff that you're building, you talk about your team. Then months four and five, you have technical integration discussions. So this is getting really deep. And then month six, the partnership is de-prioritized by the big tech company.

Now the big tech company even, okay, let's imagine it wasn't sneaky at all, but let's just imagine that they genuinely did de-prioritize because they got a new CEO and they've got a different mission. If you're in little tech, six months of senior leadership, like the CTO, the CEO, the CMO going and preparing all of these presentations and, you know, preparing for all of these meetings, that's going to be a huge distraction.

the team. even if the big tech company doesn't intend to kill the startup, they might do so inadvertently. another risk, and I'm going to give you some examples, I'm going to give you some ideas to mitigate, just in a minute. Another risk that happens with small tech and big tech or little tech and big tech is platform dependency. So basically when little tech

is completely dependent on big tech platforms. And the is that kind of we're kind of there. That's already happening because, for example, if you're on AWS, if you're using AWS or you're using Microsoft Azure as a little tech company, you're dependent on big tech. So it's not, you can't completely avoid it, but just be aware that

there's, this is a risk and that you do have risks within your tech stack and within your product. So for example, you know, when Apple brought in their privacy changes, and that was what I think about 18 months ago, that basically, you know, had a really big impact on ad tech companies. And so they'll add tech companies whose revenue and prospects were basically kind of, I don't want to say wiped out, but we're really, minimized by a change from Apple.

Sophia Matveeva (16:44.101)
Also, you know, businesses that depend on influencer marketing, they always complain how Facebook and Instagram can just change their algorithms. And all of a sudden, all of their marketing campaign and all the stuff that they were doing is basically no longer working. So if you're a little tech, you are going to be dependent on big tech for your basically tech solutions, but just be aware that it is a risk. So here are some protection strategies for little tech to protect yourself against big tech.

So first of all, never slow down product development when you are in deal talks. And I know it's really hard and I know it's really exciting. And I know that, you you start picturing like, yes, and now I'm going to go and buy all these things and finally prove to all my high school rivals that I am amazing. But just think about the timeline that I've told you about. Think that like the stuff that I'm telling you about, comes like I'm not making this up, right? It comes from something.

So just be careful. And so just resist that temptation to basically leave your actual day job of product development and strategy and moving forward for, you know, to pursue this exciting deal talk. Also set clear timelines and milestones for your partnership talks and for your strategic oppositions discussions. Because what you don't want to do is you don't want to keep on turning up to meetings when you're super prepared.

You've rehearsed this presentation and you keep on just having meetings after meetings after meetings. you know, big tech companies, but also not just big tech, big companies can be really guilty of kind of just stringing you along without even necessarily meaning to because they just have so many people and so many people need to sign up. But the thing is for you, like if you are spending your time on these things and they don't go anywhere.

This could be lethal. So you basically say, okay, you know, we are going to spend one month on this. If after one month we are not moving forward to the next stage, you know, we're going to have to, you know, leave this discussion. And if they're serious, I know, I know it really scary. I know, totally get it. But if they are serious and they really want to move forward with you, then they will hurry on their side. Whereas if they're not serious, you'll be able to tell.

Sophia Matveeva (19:09.879)
I mean, people will tell you also to get NDAs in place with Big Tech, but just really think about it. Who do you think has more money for lawyers? yeah, sign an NDA, but in reality, they're super hard to enforce. But most importantly, for whatever partnership or acquisition, these discussions should be parallel to, not central to your growth strategy. So your growth strategy as little tech should be

We need to get more customers. Those customers should pay us enough for us to have a profit and for us to be able to pay everybody. Like that basically should be your strategy. If your strategy is we're going to build this thing and then hope that Google buys us. That's a bad strategy. Don't do that. That's not really a strategy. And also then you're giving all of your power away. So if you're actually building a sustainable business as Little Tech, then well.

Then you actually have a chance to become Big Tech. Wouldn't that be wonderful? Okay. So let's sum up. Know that what is good for Big Tech is not always good for Little Tech. There are advantages to working in either one. So if you're looking for your next career move, think about this distinction between Little Tech and between Big Tech. And if you're a founder, Big Tech could be your acquirer.

and they could make you super rich and super famous, which would be wonderful. Or they could destroy your business, which would be terrible. So be, you know, be curious, but also be careful and focus on your priorities, focus on your product and focus on your business. And finally for everybody, when you next hear a news report about the tech sector, then ask yourself, well, who are they talking about? Are they talking about big tech or are they talking about little tech? And because

You know, I've noticed that most of the time they are talking about big tech and that is not the only game in town. Well, my dear smart person, I hope you enjoyed this week's lesson. And if you did, then please like this video and leave me a comment. read all your comments. Love hearing from you. And if you're listening on Apple or on Spotify, then please leave the show a rating and a review. On that note.

Sophia Matveeva (21:34.337)
Have a wonderful day and I shall be back in your delightful smarties next week. Ciao.