Don't Be First... Be Best
I briefly discussed the power of acting last in a previous post on the power of procrastination, and I thought I'd carry on the theme this time around. The advantage of deferring action applies not only to negotiation and decision-making, it is a fundamental Principal for almost all aspects of business -- especially taking a new product or service to market. This core idea runs contrary to most people's intuition, but it is becoming more and more true particularly for internet and information businesses.
Everybody wants to be first. It's as if they're running out during the great Oklahoma land-rush and they want to pick the most desirable piece of real-estate before anyone else gets there. These hopelessly naive folks even use the term "greenfield" to describe a new opportunity. Every time I hear an over-caffeinated hype-ster use that term, I can't help but imagine them twirling around among the wildflowers, arms outstretched as if in some horrible commercial for feminine hygiene products or an out-take from The Sound of Music.
The problem with business is that you don't know the lay-of-the-land before you get there. Any new market is much, much more like a minefield than it is a greenfield.
Consumers in general are fundamentally afraid of the unknown, bound by habit, and slow to change. This means that you may have the most amazing, valuable, innovative product or service the world has ever seen, but if people need to adapt themselves to it, or learn about it to understand it, you have a seriously uphill battle on your hands to gain traction. On the other hand, if you can work within the confines of what people are doing already, but just let them do it cheaper, faster, easier, or somehow better, you have a much better chance of success.
Let someone else bloody the beach -- it is much easier to then walk in and optimize a business within a proven, established market than it is to make the market.
Further, there is very little first-mover advantage in business. And what advantage there ma ever have been is becoming less relevant all the time. Being first is not an advantage, in fact, it is increasingly becoming a disadvantage.
The examples of this phenomenon are too numerous to cover...
Lycos, Webcrawler, AltaVista, Yahoo, and many others all bloodied themselves on the beach of web search. Google was really last to the party, and just did it better (much, much better).
Friendster was the first social network that gained any real adoption. They proved the model that tracking friends online within a social networking website was interesting and worthwhile. That first-mover advantage didn't last long, however, as soon enough MySpace came along, and ultimately (up to now), FaceBook did it best.
There are also hundreds of examples from the world of traditional old-school business -- Southwest Airlines was not the first airline. When they launched, American, Delta, etc. were large, well-established brands. That simply meant that Southwest didn't have to spend enormous amounts of time and resources convincing people that flying was a worthwhile, safe, attractive means of transportation. They could simply focus on being best (in their case, that has meant cheapest).
Don't get me wrong, being first doesn't necessarily mean disaster. But what really matters is being best. If you are first (and well-enough capitalized to educate the market) **and** best, then you have a chance -- but really no better chance than the next company to come along, and often a worse chance. That's because the important question is not "can we be first?", but "can we be best?" -- more often than not, these are mutually exclusive. The one who is first is often rushing blindly into the unknown, making mistakes, and spending energy educating the marketplace. Those who come after gain the benefit of all those mistakes and education while being able to focus almost exclusively on what really matters -- being best.
