“If you’re not first you’re last,” or so we thought according to Will Ferrell’s memorable performance as Ricky Bobby in Talladega Nights.
As it turns out, this isn’t always true as it relates to marketing and the so-called “First-mover advantage.”
But wait, how is it that being first to market, doesn’t put you ahead of the curb?
Well for starters, let’s acknowledge that some of today’s most successful companies, were in fact — not the first to market.
I’m talking Facebook, Google, Starbucks, and Spotify.
When we think about social media, most of us immediately think ‘Facebook.’ However, before Facebook entered the market in 2004, there were other networks such as Friendster and Myspace.
These sites were a hit for a while, but they ultimately failed, giving Facebook the opportunity to dominate the market.
Shockingly enough Google was not the first search engine created. While it may, in fact, be the most widely adopted, before them, there were other search engines such as Open Text, Magallen, and Infoseek.
Music is something most people can relate to, however in spite this commonality, most first entrants such as Napster, and Pandora weren’t profitable. Spotify saw this as an opportunity, and they currently control over 80% of the streaming market.
Starbucks wasn’t the world’s first coffee shop, what set them apart, however, was their strategy. Everything from their value proposition, to the atmosphere in their stores, has played a crucial role in their success.
Perhaps the most significant similarity between these companies is that they learned from the mistakes of their less fortunate counterparts.
Of course, that’s not the only reason you shouldn’t rush to market. So, before you run off to work on your next venture, consider these factors:
1. It’s expensive
Launching a new product or service requires a ton of research. Companies resort to research to understand customers buying behaviors, their pain points, and how their product fits in.
Once they complete their research, they are usually looking at additional costs associated with educating the market.
As a result, early movers are usually far less profitable than late entrants.
2. Resistance to change
Consumers are creatures of habit. We want better and shinier things, but at the same time, we have a psychological attachment to our current solutions.
As a company, getting people to adopt your new solution is tricky.
3. No experience to fall back on
The obvious advantage of late-movers is that they can learn from the mistakes of early entrants.
What worked, what didn’t, how did customers react, how does our product compare, and more importantly, how can we be better.
To clarify, I’m not suggesting that innovation doesn’t matter. It does.
However, in a world where consumers are surrounded by choice, it pays to get it right.
Jumping to market too soon can pose a threat, but jumping in too late, can also be detrimental.