Is small the new big?

Get Big Fast was the motto for startups, because big companies can
go public and get more access to capital and use that capital to get
even bigger. Big accounting firms were the place to go to get audited
if you were a big company, because a big accounting firm could be
trusted. Big law firms were the place to find the right lawyer, because
big law firms were a one-stop shop.

And then small happened.

Enron (big) got audited by Andersen (big) and failed (big.) The
World Trade Center was a target. TV advertising is collapsing so fast
you can hear it. American Airlines (big) is getting creamed by Jet Blue
(think small). BoingBoing (four people) has a readership growing a
hundred times faster than the New Yorker (hundreds of people).

…

Small is the new big because small gives you the flexibility to change the business model when your competition changes theirs.

Small means you can tell the truth on your blog.

Small means that you can answer email from your customers.

Small means that you will outsource the boring, low-impact stuff
like manufacturing and shipping and billing and packing to others,
while you keep the power because you invent the remarkable and tell
stories to people who want to hear them.

A small law firm or accounting firm or ad agency is succeeding
because they’re good, not because they’re big. So smart small companies
are happy to hire them.

Please excuse the liberal quoting from Godin’s post.  He just makes the point so much better than I would.  The point is, small is the new big and small is better.  To get to this conclusion you have to put aside the traditional belief that bigger firms are automatically better and more successful because they are bigger.  Coming from a large firm I can say that large firm’s do have their advantages though.  Elefant refers to this in her post:

Not surprisingly, Stephen, who works for a 370 attorney firm doesn’t
completely buy Seth’s thesis.  Stephen notes that Seth doesn’t offer
many statistics to support his view and also argues that these days,
large firms, like small firms need to be good to succeed.  Finally,
Stephen cites what he perceives as a large firm advantage:

Often, large (and medium-sized firms) bring together a team
of attorneys with individual specialties that no small firm can match.
I am currently working with a client that in one "small" matter, has
issues involving not just patent protection but issues in taxation,
bankruptcy, interstate & international commerce, regulatory and
criminal law, all rolled into one. Fortunately, we’re able to put
together the right mix of attorneys to work through the problems and
come up with a success overall.

This argument does have merit although it ignores, as Elefant points out in her post, that this only holds true when smaller firms don’t band together and form alliances and pool their collective resources.  In addition, commonly available technology means you don’t have to have a large and fully stocked office to do what the big boys do.  Just consider what you can do with a laptop and a multifunction device (print/scan/copy/fax) in a relatively paperless business environment.

Posts like these really give me hope and inspire me.  The implications for small and medium businesses are astounding.