Your Startup Will Change the World! Here's How I'll Stop You with AI.

Influencers promote it, the media celebrates its stars, and bookshelves groan under the weight of new books promoting entrepreneurship. Not as much attention is paid to celebrating the people who quash innovation. Who stop it in its tracks. My second engineering job was in a new venture division of a phone company. There I learned how to fend off upstarts using every lever of power available to us. These weren't luddites I learned from, mind you, but incredibly smart and crafty businesspeople who protect jobs and 401k shareholder value by maintaining the status quo. It would be easy to judge them, but they have always been part of commerce and always will be. Every entrepreneur should know the tradecraft.

While I'm listing the most common communications tactics used to crush startup companies, a few less commonly acknowledged, more sinister tactics are added as well.* It will be a cautionary tale for some, hopefully instructive for everyone. No judgement. The question is, can AI help transformative startups win against the inevitable pushback from powerful entrenched competition?

To illustrate the tactics I’ll use the promising example of fusion technology and its ability to generate pollution free power at scale. It has the potential to almost eliminate other forms of energy generation. An exciting startup out of MIT bringing fusion power generation to market is Commonwealth Fusion Systems (CFS). For simplicity sake, let's consider just one competitor that will potentially attempt to squash CFS. Bill Gates is promoting a competitive nuclear fission technology for his company, TerraPower. Because Bill kept Microsoft in a dominant market position for decades, defending it against thousands of startups with ostensibly better technology, let's assume he will employ many of the same communications tactics against startup companies like CFS. Ultimately, the question being asked is, how can AI help the CFS communicatins function win the battle against a Goliath like TerraPower?

Microsoft's Competitive Tactics, Used to Fight Fusion Energy?

Below a short summary of Microsoft's business/communicatins tactics and predictions for how they might translate to the fusion vs. fission energy competition. While most are "business" or "legal" tactics, they all require considerable communications input and exceuction to be successful.

Legal Tactics:

1. Bundling Products:

2. Microsoft bundled its Internet Explorer/Edge with Windows OS, making it difficult for other browsers to compete. Yes, it is losing to Google, but what happened to Alta Vista, Yahoo, FireFox, and a dozen other early search engines? Messaging for the bundled offer included simplicity and expense reduction, particularly for enterprise customers who had to manage and support thousands of Windows computers.

3. Prediction: Gates’ energy company could bundle energy storage or distribution services with their nuclear energy offerings, making it difficult for standalone fusion energy providers to compete. TerraPower already has dozens of partnerships and alliances tying together players from every sector of the energy industry.

4. The message: Selling the full solution vs selling a breakthrough product. Tough to beat.

5. Exclusive Deals and Partnerships:

6. Microsoft secured exclusive deals with PC manufacturers to pre-install Windows, excluding other operating systems.

7. Prediction: Gates’ company might secure exclusive energy supply deals with large corporations (e.g., Amazon acquired a nuclear powered data center in March) or government entities (e.g., Japan, Korea, US Dept of Energy), limiting market access for competitors.

8. The message: Purchasing a breakthrough product will be risky, even if it is a better product. If you want to ensure continuity of your company, go with the safest choice.

9. Predatory Pricing:

10. Microsoft was known to reduce prices to levels that competitors couldn't match.

11. Prediction: Gates’ company could lower its energy prices temporarily to undercut a fusion energy startup, making it financially difficult for CFS to compete, draining them of precious investment capital until a point where they can be bought or go out of business entirely.

12. The message: The big boys will be in business serving our customers long after startups are dead and gone. If you partner with them, it could be a "career limiting" move.

13. Aggressive Marketing:

14. Microsoft invested heavily in marketing to dominate market perception.

15. Prediction: Startups like CFS can expect aggressive and unrelenting PR campaigns emphasizing the proven reliability and readiness of nuclear fission over “untested and unproven” fusion energy, sowing doubt about fusion’s technical and financial feasibility.

16. The message: With the exception of early adopters, most consumers will listen to the loudest voice in the room regardless of an argument's merit. As the saying goes, "Nobody ever lost money underestimating the stupidity of the American people." I'm more positive on the intelligence of the average American, and citizens of other countries too, but unfortunately the saying has proven right at times.

17. Litigation and Legal Pressure:

18. Microsoft engaged in prolonged legal battles to drain competitors' resources.

19. Prediction: Gates’ company might use IP lawsuits and regulatory challenges to slow down CFS’s progress and increase its operational costs. Investors have a limited window to recoup investments. A legal battle over energy production, with all its regulatory and environmental complexities, could take decades.

20. The message: We have more lawyers and a bigger war chest. Startups can't outspend us or outlast us through the legal process.

21. Spreading FUD (Fear, Uncertainty, Doubt):  

22. Microsoft was accused of spreading misinformation about competitors’ products.

23. Prediction: Gates’ company could spread doubts about the safety of fusion energy, impacting public and investor confidence.

24. The message: It's likely FUD will be rooted in University research papers, independent lab testing, and an avalanche of expert testimonies in public hearings.

25. Influencing Standards and Regulations:

26. Microsoft influenced standards and regulatory bodies to favor its technologies.

27. Prediction: Gates’ company could lobby for regulatory standards that are more favorable to nuclear fission, creating additional hurdles for fusion energy to be approved by governments around the world.

28. The message: Another long-tail tactic to box competitors out for decades. Like the legal system, getting standards approved is like a slow train ride that stops at every station.

29. *Buy Them and Burry Them:

30. Microsoft purchased startups Danger Inc. (2008), Massive Inc. (2006), Oblix (2005), Accompli (2014), and many others with the stated intent to improve Microsoft’s existing products or create new revenue streams based on synergies. None of these startups exist today. The investments were written off as losses. In fairness, history has proven acquisitions in every industry are extraordinarily difficult things to do. Nonetheless, buying a small company with a superior product can be the cheapest way to silence it.

31. Prediction: Gates’ company could buy CFS promising a “unification” of sorts, like bundling MS Office products, that balances different types of energy sources and creates a level playing field for the best solution to win. “A better, cleaner combination of energy sources for all countries and citizens. Giving choice and preserving freedom.” After the company is absorbed, fusion energy could be “deprioritized.”

32. *Snake Bite:

33. Legend has it that competitors used to send women and drugs to Lawrence Taylor’s hotel room the night before the legendary linebacker was playing in a big game. Preying on a startup leader’s vices, whatever they may be, is standard practice in the big leagues. While most startup founders I’ve met are too smart, moral, and self-disciplined to be plied with women and wine, I have seen several led out to the proverbial dessert with the question, “do you want to be rich, or do you want to be king?” …Only to have their companies sold out from under them by investors and partners. No judgement. It just happens that way sometimes.

34. Prediction: This isn't something I can predict will be used. But office affairs and addictions of all types are a reality of life at every level. Founders are under extraordinary levels of stress and worry about their family's financial well being. And the media machine will never tire of reporting bad or sad news.

Based on this sample of effective, historical tactics used by Microsoft, are some of the tactics already in use by Gates' energy company? And what would be the best response from CFS? How can AI help the communications function respond faster and more effectively? Looking at it in the broadest terms:

1. Lobbying and Regulatory Influence:

2. There are considerable lobbying efforts already under way to expedite regulatory approval for Gates’ nuclear fission technology. The technology is rooted in part in Soviet era “breeder reactor” nuclear technology. Because the technology has been around so long, it’s likely the current lobbying efforts will create barriers for fusion energy and any other “unproven” energy source.

3. The message: Find one or several beachheads in industries or applications were fission energy cannot work technically or operationally and build from there. You can't biol the ocean as a startup, although so many try. Making a technology irraplaceable in certain vital applications builds confidence and offers time to grow against a larger entrenched competitor.

4. Strategic Alliances:

5. Bill’s energy company has already formed alliances with major energy corporations like GE, Southern Company, and Pacific Corp. Exclusive deals with foreign governments, unions, equipment manufacturers, banks, and service providers, among others, will continue. Locking out new types of energy sources is the smartest and cheapest way to fight the fight against superior technologies. The Windows operating system wasn’t the first or the best of its kind, but it was locked into a broad, intelligently linked web of companies and stakeholders.

6. The message: As above, there are industries and applications where even the most powerful competitors cannot win. Find the right customers with the fusion message, early adopters with a vision of their own who will take CFS's technology and build on it. That's the strategy offered by Geoffrey Moore in his epic book "Crossing the Chasm." The data back it up as a sound business strategy rooted in a compelling company narrative.

7. Public Relations and Thought Leadership:

8. "A majority of Americans now favor nuclear energy..." For about a decade we have been seeing high-profile media appearances and thought leadership research designed to shape public and governmental opinion in favor of Gates' vision for nuclear fission. Building a favorable opinion of nuclear energy as a fix for climate change is a brilliant move. Needless to say it will be challenging for any startup to compete with the breadth of reach and the power of voice already in motion from fission supporters.

9. The message: A "judo strategy" is a financialy prudent and highly effective tactic if done right. TerraPower's PR juggernaut can't be stopped but the strength and weight of it can be used against itself. Positioning CFS and fusion energy as a complimentary technology to fission energy, or "the opposing spoiler" technology, earns CFS a spot in every major article, speech, research paper, university classroom alongside TerraPower. Wherever the big company appears in writing, video or conversation, make it essential that the startup be mentioned too if the principle of fairness is to be observed.

10. Exclusive Deals and Long-term Contracts:

11. Securing long-term contracts with key energy consumers and government entities, potentially at discounted rates, to lock in market share.

12. The message: Keep it simple for the masses, "There is a better, cheaper, more responsible way." Stick with "common sense" as opposed to a morality fight, however. Occupying the moral high ground is tempting, but keep in mind that 68% of Brits dissaprove of Just Stop Oil protestors, while a majority agree something must be done about climate change. A public battle of moralities can be a slippery slope for energy providers.

13. Litigation and IP Challenges:

14. Engaging in legal battles over IP and regulatory compliance to slow down competitive progress and increase costs.

15. The message: Transparancy has proven a good tactic to wage in this kind of communications battle. Access to information has never been more possible in human history and it works well for startups trying to disrupt an established industry. Calling attention to legal maneuvers used by bigger competitors can sway public opinion and put pressure on regulators that favor the little guys. Owning a brand reputation as a perrenial underdog fits with American culture, and much of the rest of the world.

Strategic Response Plan with an AI Assist

At this point it makes sense to pause the big picture thinking and get into the details of an AI assist with communications strategy and execution. That will all be detailed in the next post. For now, seeing the simple AI framework that will be used will hopefully make the follow-up post worth coming back.

HOW TO:

1. AI PROMPT (Best Practice – discussed further in another blog post)

2. Tell Chat GPT how you want it to act.

3. Give it some background information.

4. Ask your questions.

5. Ask Chat GPT to ask you clarifying questions before giving you the best possible response.

6. Prompt Sample: “You are in charge of External Communications for a fusion energy startup company called Commonwealth Fusion Systems (CFS). You are competing with the largest energy companies in the world. Your fusion energy product has the potential to make all other forms of energy generation irrelevant if production and distribution achieve scale. Your competitors include a nuclear fission energy company owned and promoted by Bill Gates, the former founder of Microsoft. All your competitors, including Bill Gates’ company, are already forming alliances with one another to scale up the use of their competitive fission energy production, driving you out of the market before you can launch your superior product. What are the current alliances and partnerships they have already formed? What alliances and partnerships are they likely to pursue given their past partnerships? What are the opportunities for my company to pre-empt their alliances and partnership deals? What are opportunities to form alliances and partnerships with organizations who are against fission nuclear energy? Ask me to clarify questions before you respond in order to provide me with your best possible answers.