One of the things I enjoy most about 123G is the wide range of clients we work with, from pre-revenue startups to mid-journey scaleups to established public companies. No two clients are the same, no two engagements alike. But one theme emerges: almost all our clients are wrestling with the challenge of incumbency.
Some are on the outside, new entrants pushing into markets where well-entrenched incumbents have already staked out significant acreage. Some are on the inside, incumbents defending that territory, or trying to build something new within a machine designed to protect what already exists. And many are both at once: the established leader in one market or geography, and the newcomer in the next.
Whichever side they’re on, the question is the same: how do you win? One answer, the favorite of traditional consultancies, is: disrupt! Don’t get me wrong—I’m a big fan of disruption, having been both disrupter and disruptee at various times. But what I’ve learned over three decades in business is that disruption isn’t an activity. It’s an outcome. It’s what happens when you think differently and go left when others go right—when you act more like an insurgent and less like an incumbent. Accepting the incumbent’s terms is a forced march to mediocrity.
The original insurgent
Go back a few thousand years and you’ll find the playbook. Everyone knows how David and Goliath ends. Fewer people remember what happened just before. King Saul, wanting to give the kid a fighting chance, handed over his own armor—bronze helmet, coat of mail, the royal sword. David tried on the outfit, said he couldn’t move in it, and took it all off. Then he walked out with a sling and five smooth stones.
Goliath expected to meet him at close quarters, where a giant in full armor wins every time. David simply declined. He kept his distance, moved where Goliath couldn’t, and turned his enemy’s greatest advantages—size, experience, an arsenal built for hand-to-hand combat—into his biggest weaknesses. The incumbent’s armor, handed to the insurgent, is dead weight.
So what does all this have to do with business, and with the work we do at 123G? I learned the answer from Goliath’s side of the field.
When I almost ended up like Goliath
From its inception, Constant Contact served as a poster child for insurgency. Driven by an unflinching focus on the success of small businesses, CEO Gail Goodman and the team she brought together innovated across the board: product offering, pricing, and customer acquisition model. The company ultimately created its own category. By the time I joined as CFO, we were the incumbent: we dominated email marketing for small businesses, we’d gone public, and we had our sights set on $500 million a year in revenue.
Then we faced an existential threat: Mailchimp was giving its product away. Like David, it knew a frontal attack on the market leader wouldn’t work, so it outflanked us. Where we owned the mountain, Mailchimp saw other, bigger mountains it could scale, and freemium was its way up. We couldn’t simply follow. Free meant a revenue trough, and no public-company investor base was going to sit through a few lean years so we could come out stronger. Mailchimp was a fraction of our size, with no such constraint.
The lesson was a humbling one. Our biggest strength—being a profitable, predictable public company—was the very thing that made the obvious response impossible. A good insurgent hunts for precisely that spot, where the incumbent’s strength becomes a liability.
But the team at Constant Contact didn’t sit still. We returned to our insurgent roots and contemplated a mountain taller than any Mailchimp was climbing. We reimagined our offering, pricing, and messaging. We stood up a small cross-functional team, separated it from the rest of the company, and tasked it to create, iterate, and execute at a breakneck pace. Rather than accept Mailchimp’s terms, we set our own. It worked: we held our ground, kept growing, and Constant Contact was eventually acquired at a healthy premium.
How I got rewired
I wish I could tell you I’ve always thought like an insurgent. I haven’t. Most of us are trained, from college through business school, to think like incumbents: here’s how Procter & Gamble got big, here are the steps, do them in order. I sometimes say 95 percent of us come out wired that way, and for years I was one of them.
Vistaprint changed that. When I joined, it had just gone public and was growing over 80 percent a year off a base of more than $100 million, unseating bigger players in a sleepy printing market. Robert Keane, the founder and CEO, had a line I’ve carried ever since: when you’re growing that fast, tomorrow comes very quickly and looks very different. Whatever you build today has to work at twice the size in 12 months. He pushed everyone to break glass, and while I resisted at first, I eventually got it. Plenty of people say “break glass.” Very few embrace and live it.
How insurgents fight
Every insurgency I’ve been part of, or up against, has had a few things in common.
They change the rules instead of playing by them. At Volante, the safe move would have been to describe our offering as one more payment hub and line up for the comparison spreadsheet. Instead, we came in with an audacious idea: banks would shift their real-time payments processing to the cloud—and we’d give it to them for free. It sounded crazy, but that was the point. Within two years, Volante was the world’s No. 1 seller of wholesale payment systems. It was the Mailchimp lesson again, this time played from David’s side.
They turn scarcity into an edge. No brand, no reference customers, no budget for dinners and conference booths. One founder-CEO I know well, whose company is now in the IDC FinTech 100, told me that when he and his co-founders started out, they couldn’t even afford a day pass to the big industry event. So they stood outside the exhibition halls, handed out flyers, and offered to buy attendees a cup of coffee at the nearby Starbucks.
They focus. Incumbents have a portfolio to protect, so their attention gets spread across dozens of priorities, each with its own owner and budget line. Insurgents can afford to pick the one objective that matters most and pour everything into it. They also have to, because they don’t have the resources to do anything else.
They move with speed and agility. Insurgents work out the least time it takes to reach a compelling outcome, then take no more. They don’t wait for permission or consensus. They’d rather be early and occasionally wrong than late and safely right, and when the market pushes back, they change course with discipline.
Three signs you’re the incumbent
You can be an insurgent at a Fortune 500 company and an incumbent at a 20-person startup. Size isn’t the tell. Behavior is, and three behaviors give the incumbent away.
Layered decision-making with no clear owner. An incumbent takes nine months and six matrixed management tiers, including the CEO, to issue a press release announcing its move into a new market. An insurgent picks a date, gets sign-off from three key stakeholders in a single meeting, and launches it in a couple of weeks.
Risk aversion. Nobody says “we don’t have all the answers, but let’s go.” What you hear instead is “we can’t talk to the market until it’s perfect.” So incumbents commission focus groups, pore over data, and keep polishing. Insurgents take their point of view to five customers, listen, and forge ahead.
Silos. In a startup small enough to fit around one table, whoever is pitching the product also knows how it’s built and what the last customer said about it, and that integrated view shapes everything the company does. In a large company, the same view is split across departments and rarely comes back together, and the incumbent ends up buying attention instead of earning it: flashy ads, lavish client dinners, Super Bowl tickets.
None of this is a knock on incumbents; the best of them work hard to keep an insurgent streak alive. Nor does insurgency mean skipping the fundamentals. Those are just the price of entry. What sets you apart is what you build on top of them.
Where insurgents thrive
Every insurgent, if it’s doing its job, wants to become the incumbent someday. That’s why the mix of people at 123G matters so much to me. Our strategic operators have lived the whole arc, from both sides: they’ve been insurgents and incumbents, disrupters and disrupted. They know which parts of the incumbent playbook are worth keeping and which have to go. We look for people whose default is contrarian and whose bias is toward action, and we make sure those voices carry real weight in our engagements.
Two of our core values say it plainly: “Be an insurgent, not an incumbent” and “Prioritize ruthlessly.” Our clients come to expect both, and they hold us to them. If they wanted things done the way 95 percent of people would do them, they wouldn’t need us.
Take off the armor
Back to David for a moment. The armor Saul offered him was the best in the kingdom. But David knew that wearing it meant meeting Goliath on Goliath’s terms, and losing. So he changed the terms: what he lacked—size, strength, battlefield experience—stopped mattering, and what he had—speed, distance, surprise—decided it.
Before your next big move, ask yourself whether you’re wearing armor only because someone handed it to you. Then think about the last decision that really mattered. Did you go left when others went right? Did you fight like an insurgent, or march like an incumbent?
