Startups Must Embrace Their Unfair Rookie Advantage


A version of this article previously appeared on Forbes.

There are a number of disadvantages to being a rookie, irrespective of the profession. Rookies must learn on the job, having few relevant experiences they can draw upon to resolve the daily workplace challenges. However, rookies possess a key advantage: they are unknown, which often leads their opponents to underestimate their abilities. In the case of a startup, this relative anonymity results in a powerful Rookie Advantage.

Late in the 1936 baseball season, a 17-year-old Iowa farm boy struck out fifteen St. Louis Browns’ batters in his first Major League baseball game. Shortly thereafter, he fanned seventeen Philadelphia Athletics’ players: an unprecedented feat for anyone, let alone a teenager with no professional sports experience.

How did this young, inexperienced athlete baffle so many veteran players? The answer is simple: the Browns and the Athletics had the misfortune of facing Bob Feller when he was completely unknown. There were no scouting reports on Mr. Feller because the Cleveland Indians circumvented league rules by drafting him directly from High School.

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In partnership with Docstoc, I created the following video, in which I discuss how startups can leverage their inherent rookie advantage.  You can watch the embedded video below or at YouTube:

Political Rookie To Political Hack

During the 1992 Presidential campaign, Ross Perot, Bill Clinton and George Bush Senior participated in a series of national debates. Perot’s debating style differed greatly from that of the career politicians. He utilized simple charts and spoke in plain English. He was also unafraid to risk offending a particular voting block and thus many of his comments were refreshingly blunt and non-scripted.

Many people, including jaded pundits, felt that Perot won the first 1992 Presidential debate and that he held his ground in those that followed. Even though he effectively pulled out of the election as it neared its close, Perot still garnered nearly 19% of the popular vote, more than any independent or minor-party candidate since Theodore Roosevelt’s 1912 election victory.

Fast forward to the 1996 Presidential campaign. Mr. Perot debated Vice President Al Gore regarding the North American Free Trade Act. The debate was shown on Larry King Live and was watched by a record number of cable-TV viewers. No longer an unknown rookie, Perot’s effectiveness was greatly diminished.

To Perot’s chagrin, Al Gore and his Democrat handlers were well apprised of his unorthodox debating tactics. Perot’s simple, easy-to-digest graphics were matched chart-by-chart by Mr. Gore. His homilies (e.g., “That dog won’t hunt,” “Measure twice, cut once.”) competed with similar down-home utterances from Mr. Gore, which he delivered in an exaggerated Tennessee drawl.

Perot’s dismal performance against Al Gore, a man not noted for his debating expertise, is a powerful example of what happens when a rookie fails to build upon his initial success and evolve his game.

A Great Fastball Is Not Enough

Bob Feller was not just a rookie sensation. His career began with a fierce fastball, but he thrived for two decades because of his unpredictable lack of control and his willingness to expand his pitching repertoire. As he introduced new pitches, batters had to guess what he would throw next. This element of uncertainty made all of his pitches, including his mainstay fastball, more effective.

Startups are like rookie athletes – unknown commodities full of promise and boundless energy, but lacking experience. They are also often swift and a bit reckless. Just like in sports, as soon as a company begins to achieve success, competitors will emulate the tactics they can readily copy and attempt to thwart those which they cannot co-opt.

Although there is nothing you can do to entirely avoid this inevitability, you can reduce the effectiveness of this tactic by implementing a bold and unpredictable go-to-market strategy and modifying it as soon as your competitors believe they have you figured out.

You can also keep your competitors off-balance by introducing new products into new and unexpected markets, distributing existing products via new channels and serving novel customer segments. By systematically modifying your tactics and keeping your strategic cards close to your vest, you can frustrate your opposition’s efforts to anticipate your next move.

In business, like in baseball, no matter how hard you throw, if you pitch in a methodical, predictable manner, it is only a matter of time before your competitors start to swing from their heels and knock you out of the park.

Follow my startup-oriented Twitter feed here: @johngreathouse. I promise I will never tweet about that killer burrito I just ate.


John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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