Back in time, sitting at the university bench listening to the enlightened marketing professor, we were taught the strategic importance of the first-mover advantage. After 20+ years in business, I’ve seen it materialize in real life numerous times but I’ve also witnessed the opposite happen. Even having first movers go out of business…
The first in business is not always the winner. The winner is rather the first who is able to propose a product with the minimum required quality whatever the benchmark is at launch time. The “Last Best” is able to do so as s/he often benefits from mistakes committed by the “First Bet” (first mover). “First bet” naming refers to the fact that the first mover is never sure about the existence of a big enough market and the product/market fit. In that sense, in many occurrences, the first mover takes a bet.
If you are the only one trying to sell a totally new product, you are either visionary or naive and most probably both ☺ — K
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For example:
- Many social networks preceded Facebook (e.g. myspace) but none of them was good enough to grow and survive. Which makes Facebook the “Last Best” and not the “First Bet”.
- Haash.io came late into the customer support market, but it came with a breakthrough approach! You need less human involvement, less (currently unreliable) bots and still, get improved reactivity and customer satisfaction. This is made possible by making public resolved customer support tickets in an SEO friendly manner. As simple as that. Simple is beautiful.
- Same goes for iPod vs. MP3 player… Apple did not invent the technology on which the iPod runs. It came out of the laboratories of Creative Technologies, a Singapore based firm. In fact, Apple launched the iPod 22 months after the technology was invented.
Once surviving the launch phase as the “Last Best”, continuous improvement is key. Others can still benefit from your (numerous) errors and outsmart you.
So as a “Last Best” how can you protect your business? Or as a latecomer, how can you outsmart the “First Bet”?
- Minimum initial quality (inline or above expectations): the later you launch the hardest it becomes to achieve the “Last Best” as competitors’ quality increases and the expertise gap grows.
It’s better to launch half a product than a half-assed product — Jason Fried - Any other unfair advantage (e.g. community, strong brand image…).
- Any social or technological breakthrough is an opportunity for a newcomer to redefine the rules of the game and make your product or brand obsolete. So keep an eye on adjacent industries and technologies.
- There is also a risk related to the brand image. Is your brand tied to your product (e.g. computers for Dell) or is it tied to your values (e.g. redefining the rules of the game as for Apple)? Develop true customer loyalty by connecting with your users on the fundamental level of values & beliefs as brilliantly explained by Simon Sinek in his now-famous book Start With Why.
- One of the most important competitive advantages of a startup vs. an established business is speed. Accelerating the feedback loop is the first leg, continuous integration is the second.
- Iteration, keeping in mind that improving a product doesn’t only mean adding features but also removing a few to keep it simple.
TO SUM UP
The key takeaway is that being the first mover does not guarantee success. Nobody and nothing is eternal. You need to stay alert. Your product should continuously evolve while staying true to your DNA.
If not, at worst you’ll be forgotten history or… at best a failure business case studied at Harvard.
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If interested in learning how to work with your nature and not against it, check out my book at WorkWithYourNature.com