The tyranny of small

During a number of recent conversations a repeated theme has arisen around how a value proposition should be presented to a prospective client.  Take a very simple example - a firm creates a product that cost them £1m to create but which will create demonstrable, measurable operational efficiencies for a client firm that would be worth £5m per year.

Do you sell this product at £1m plus a profit margin or at £5m less some extra value for the client?

The "tyranny of small" is the thought process that pushes the firm to sell at the "cost plus margin" model rather than the "actual client value" model.  By thinking small the vendor remains small since it does not generate enough profit to fund growth and development. Think small = stay small = the tyranny of small.

This is a theme to which I will be returning....