It’s every entrepreneur’s nightmare: you’re sitting on a great business idea—and you get scooped! In this scenario, it turns out that while you were busy fine-tuning your crazy-good concept, somebody else started a business that, say, allows people to communicate online through 140-character messages. And you’d been thinking you were the only one who had come up with that so-crazy-it-just-might-work idea!
Disheartening, to be sure. But is your business idea really finished? Not hardly.
We hear a lot about first-mover advantage, which is the idea that the first occupier in a specific market segment has a significant competitive advantage. But, it turns out that second-mover advantage can be even greater. The Financial Times recently ran a story declaring that being first-mover is not always a surefire path to success—in fact, it turns out that “fast followers” oftentimes eclipse the first-mover.
The pink paper runs through a number of examples to prove this thesis: for example, Xerox was not the first company to release a photocopier, Pampers were not the first disposable diaper brand, Apple did not invent the personal computer (or the portable mp3 player!), and Kodak did not come out with the first camera. (OK, maybe Kodak’s a bad example.) And, incidentally, does anyone still use AltaVista, a search engine that pre-dated Google?
Why is this? As the FT explains, “so-called ‘fast followers’ have the advantage of being able to use pioneers’ experiences to learn about consumer tastes, new designs and manufacturing techniques, and the potential size of a market. They can also learn from their mistakes.”
So do you think you’ve spotted the flaw that Jeff Bezos/Fred Smith/Steve Ells (that’s the Chipotle guy) have failed to notice? Then get moving!