You know who your competitors are. You track them. You analyse their moves. You benchmark against them. You have a slide in your strategy deck with logos arranged in a quadrant.
None of that matters anymore.
The threat to your business isn't the competitor you're watching. It's the two-person team you've never heard of, building in a garage or a spare bedroom or a co-working space, who will ship in six months what your organisation couldn't deliver in three years.
They don't have your budget. They don't have your headcount. They don't have your brand recognition or your enterprise sales team or your established customer relationships.
They have focus, speed, and tools that have changed the economics of building. And that's enough to destroy you.
The Old Model Is Dead
For decades, the competitive moat for established organisations was straightforward: scale.
Big companies could afford things small companies couldn't. Development teams. Infrastructure. Marketing budgets. Sales forces. Regulatory expertise. Enterprise support. These required capital, and capital was hard to come by.
If you wanted to compete with an established player, you needed to raise money, hire people, build slowly, and hope you survived long enough to reach scale yourself. Most didn't. The incumbents won by default.
That model is dead.
AI has collapsed the capability gap. What required a team of twenty developers now requires two people and modern tooling. What took eighteen months now takes eighteen days. What cost millions now costs thousands.
The barriers that protected established players have evaporated. And most of them haven't noticed yet.
What Two People Can Do Now
Let me be concrete about what a small team can accomplish in 2024:
Build production-grade software in weeks.
Not prototypes. Not demos. Real applications that solve real problems, deployed and serving customers. AI-assisted development has compressed build cycles by an order of magnitude.
Ship features faster than enterprise teams can schedule meetings.
While your organisation is debating requirements in committee, they've already built three versions, tested them with users, and iterated based on feedback.
Focus ruthlessly on a specific problem.
They're not trying to serve every customer segment or satisfy every stakeholder. They're solving one problem brilliantly while you're solving fifty problems adequately.
Talk to customers daily.
No layers between builder and user. No product managers translating requirements. No customer success teams filtering feedback. Direct conversation, immediate response.
Pivot instantly when something isn't working.
No sunk cost politics. No careers tied to existing approaches. No enterprise architecture review boards. Just change direction and keep moving.
Operate at a fraction of your cost base.
No office. No middle management. No enterprise software licenses. No procurement process. They can run for a year on what you spend in a month.
This isn't theoretical. This is happening right now, in every industry, to every established player.
They Don't Need to Beat You Everywhere
Here's what large organisations miss: small competitors don't need to replace you entirely. They just need to carve off the profitable bits.
You have a product that does a hundred things. Most of your customers use ten of those things. A two-person team identifies which ten, builds a focused tool that does those brilliantly, and offers it at a third of your price.
They don't take all your customers. They take the ones who were only staying because there wasn't a better option. The ones who complained about features they didn't need and prices they couldn't justify. The ones who were looking for an excuse to leave.
That's often your most price-sensitive segment. But it's also often larger than you think. And once they leave, they're not coming back.
Then another small team takes another slice. And another.
Death by a thousand cuts, each one delivered by a competitor you never saw coming.
The Visibility Problem
You don't know these competitors exist until it's too late. Here's why:
They don't show up in market research.
They're too small. They're not in analyst reports or industry publications. They don't attend the conferences you attend. They're invisible to traditional competitive intelligence.
They don't compete head-to-head.
They're not trying to win your enterprise deals. They're picking off small customers, niche segments, specific use cases. By the time they're big enough to appear on your radar, they've already built momentum.
They move too fast to track.
By the time you've identified them, analysed their offering, and developed a response, they've already shipped three major updates. Your competitive analysis is obsolete before it's finished.
There are too many of them.
It's not one two-person team. It's dozens, maybe hundreds, each attacking a different slice of your market. You can't track them all. You can't respond to them all. You can't even see them all.
The traditional competitive strategy (identify competitors, analyse their moves, develop responses) doesn't work when competitors are numerous, small, fast, and invisible.
What They Know That You Don't
Small teams have an advantage that's hard to replicate: they understand the problem from the inside.
The best two-person startups aren't built by generic entrepreneurs looking for a market. They're built by people who experienced a problem firsthand, got frustrated, and decided to solve it themselves.
They've been your customer. They've used your product. They know exactly what's wrong with it, not from surveys or focus groups, but from daily frustration. They know which features are bloat. They know which workflows are painful. They know what your support team says when asked about that bug you've never fixed.
They have domain expertise you can't buy. And they're building specifically for people like themselves, people who are frustrated in exactly the same ways.
Meanwhile, your product team is three layers removed from actual users, making decisions based on aggregated data and stakeholder requests. You're building for an abstraction. They're building for themselves.
The Speed Differential
Let me illustrate what you're up against:
Your Timeline
- Week 1-4: Someone identifies an opportunity
- Week 5-8: Stakeholder alignment meetings
- Week 9-12: Requirements gathering
- Week 13-16: Architecture review and technical planning
- Week 17-24: Development sprint planning
- Week 25-40: Actual development
- Week 41-44: QA and security review
- Week 45-48: Staged rollout
- Week 49-52: Full release
Total: One year to ship a new feature.
Their Timeline
- Day 1-3: Idea and initial prototype
- Day 4-7: User feedback and iteration
- Day 8-14: Production-ready build
- Day 15: Ship
Total: Two weeks.
They can run twenty-six experiments in the time it takes you to run one. They can try things, fail, learn, and try again while you're still in committee meetings. They can find product-market fit and start scaling before you've finished your requirements document.
This isn't an exaggeration. This is the reality of the capability gap. And it's getting worse.
Why Big Organisations Can't Respond
You might think: "Fine, we'll just move faster. We'll adopt AI tools. We'll streamline our processes."
You won't. Here's why:
Your structure prevents speed.
The org chart that enables scale also prevents agility. Every decision requires alignment across teams. Every change needs sign-off from multiple stakeholders. The coordination cost alone makes rapid iteration impossible.
Your people are optimised for different work.
Your teams are trained to work within processes, not around them. They're skilled at enterprise software development, not rapid prototyping. Changing their behaviour requires changing your culture, and culture is slow to shift.
Your incentives are wrong.
People in large organisations are rewarded for avoiding failure, not for enabling success. The safe move is to slow down, add process, get more approvals. Nobody gets fired for being careful. Plenty of people get fired for shipping something that breaks.
Your technology is a liability.
Enterprise architecture, security requirements, integration dependencies: the systems you've built over decades are now anchors. Two-person teams start with a blank slate. You're dragging legacy.
Your success is the problem.
You have customers, revenue, reputation. You have something to lose. That makes you conservative. Two-person teams have nothing to lose and everything to gain. They can take risks you can't.
The same things that made you successful are now making you vulnerable. Your moat has become your prison.
What They're Building Right Now
Across every industry, small teams are building:
In education:
Tutoring tools, assessment platforms, curriculum generators, learning management systems, all more focused and user-friendly than established EdTech.
In healthcare:
Patient communication tools, scheduling systems, documentation automation, solving specific problems that enterprise vendors have ignored for years.
In professional services:
AI-assisted research, document automation, client portals, tools that make small firms as capable as large ones.
In hospitality:
Guest experience platforms, operations tools, booking systems, exactly what I built with Guest Loop, competing against platforms with a hundred times the resources.
In finance:
Underwriting tools, reporting automation, client dashboards, focused solutions that make generic enterprise software look bloated and slow.
These aren't hypothetical. They exist. They're shipping. They're taking customers.
And they're being built by people you've never heard of, in places you're not watching, with tools that didn't exist two years ago.
The Uncomfortable Question
Here's what you need to ask yourself:
If a two-person team decided to compete with you tomorrow, what would they build?
They'd look at your product and identify the bloat. They'd talk to your frustrated customers. They'd find the use case you're not serving well. They'd build something focused, fast, and half the price.
What would that product look like? Where are you vulnerable?
If you can answer that question, you know where you're going to get attacked. If you can't, you're going to be surprised. And surprise is expensive.
What You Can Do
You can't become a two-person team. But you can learn from them:
Create small, empowered teams.
Carve out groups of two to five people with real authority to ship. No committees, no approval chains. Let them operate like a startup inside your organisation.
Kill the bloat.
Look at your product honestly. What features does nobody use? What complexity exists only because it's always been there? Simplify ruthlessly before someone else simplifies for you.
Talk to customers directly.
Not through surveys. Not through customer success. Direct conversation between the people building and the people using. Weekly, if not daily.
Build internal capability.
Stop outsourcing everything. Develop people who can build, not just manage vendors. The ability to respond quickly requires skills you currently rent.
Accept cannibalisation.
If you don't build the focused, cheaper alternative to your own product, someone else will. Better to take your own customers than lose them entirely.
Watch the edges.
The threat isn't coming from your known competitors. It's coming from the segments you've ignored, the use cases you've deprioritised, the customers you've taken for granted.
The Reality Check
Two-person teams aren't going to replace every enterprise product overnight. There are things large organisations do well: complex integrations, regulatory compliance, enterprise sales, global support.
But those advantages are narrower than you think. And they're getting narrower every day.
The question isn't whether small teams can compete with you. They already are. The question is whether you'll notice in time to respond.
Your competitor isn't on your radar. They're building right now, in a room you'll never see, solving a problem you've ignored.
By the time you hear about them, they'll already have your customers.
Written by
Jason La Greca
He's been both the small team building from scratch and the enterprise organisation trying to respond. He knows which one he'd bet on.
Connect on LinkedInReady to build capability before they come for your market?
Take the AI Readiness Assessment to see where you actually stand.
Start AssessmentWant help responding to the small team threat?
Teachnology Advisory helps organisations build speed and capability.
Explore Advisory