Well, do you know how to fuck a King Kong?
Any way he wants.
If your main customer has more than 20% of your revenues then he is your King Kong.
You can spout off and get mad at me, but you are at the whim of your King Kong.
- He can ask for a payment extension, and woe betide you if you complain or charge interest.
- He asks for a meeting and we have to rush to attend.
- He asks for change and turns to answer.
- He asks you to review contract and shove more stuff at you to deliver, and woe betide you if you open your mouth.
- He changes the delivery schedule and woe betide you if you open one peep.
- He does what he wants and we play along.
Rarely does the story end well. For us.
I've had a few King Kongs in my life. Maybe because my company is a service company and when I started, I needed big accounts to build my portfolio.
Having large clients has its good side:
- Large invoices every month.
- Stability of cash inflow.
- Market credibility.
- Team self-confidence.
- Dedicated structure and high competence.
Now, the downside is that when King decides to start squeezing or even giving us a foot in the butt, the break is imminent.
But what really got in the way too much, for a few years in my company, was the belief that I could capture more large companies by scaling on the basis of King Kongs.
Perhaps that was the biggest learning before I put things into real perspective here at PaP and finally got into real, viable, scalable processes.
When you have a large customer that accounts for 50-80% of sales, it is very difficult to work to scale the company, because the dependence on this customer is so great that there is no time and energy left for new conquests of a similar size.
They are customers who take, appropriate internal resources at their pleasure.
I know it is hard to talk like this and it seems that these big customers are the villains of the whole story. Not at all.
The fact is that any move in a large company neuralgically affects its suppliers, most of them small and orbiting around it.
Of course, we would rather have one big client and have all the bills at the end of the month paid, than to have no client at all or even insufficient billing.
Now, ideally, there should be enough cash inflow, without depending more than 5% on a particular customer.
This takes a lot of time in B2B business.
Heavy investments of time, energy, and resources are required to bring the company to scale, starting with setting up the customer generation and conversion machine.
Without this structure operating for you, it is impossible to oxygenate the portfolio in the volume needed to start thinking about loosening your King Kong bonds.
And we have to think about product, since we have been serving this big customer for a long time and probably our deliverable is a Frankenstein that particularly meets the needs of this customer, but is not necessarily a competitive product in our market.
So to sum up: Competitive products and customer acquisition processes are the key assets.
It can be done. The most important thing is to start a time and implement a long-term strategy for you to create your bridge of freedom.
