I just saw the movie "Moneyball" on my flight to NY. I'd read the Michael Lewis book (please read the Wikipedia link if you have not read or seen Moneyball, for this post to make sense) and really liked it and was looking forward to the film. I enjoyed the film as well.
In the film, there's a dialog between Billy Beane and his old-school scout Grady Fuson:
Billy Beane: We are the last dog at the ball. You've seen what happens to the runt of the litter? He dies!
Grady Fuson: Billy, that's a very touching story and everything, but I think we're all very much aware of what we're facing here. You have a lot of experience and wisdom in this room, now you need to have a little bit of faith and let us do the job of replacing Giambi.
Billy Beane: Is there another first base player like Giambi?
John Poloni: No, not really.
Billy Beane: And if there was, could we afford him?
Grady Fuson: No.
Billy Beane: Then what the fuck are you talkin' about, man? If we try to play like the Yankees in here, we will lose to the Yankees out there.
Grady Fuson: Boy, that sounds like fortune cookie wisdom to me, Billy.
Billy Beane: No, that's just logic.
I think the point here is very relevant to startups who are challenging large incumbents with far more resources. You have to play a different game. If you attack your larger competitor replicating what they have, they always have a better chance of out-performing you. You have to find your edge and make sure you are playing your game, not theirs.