Whether in exploration, innovation, or business being first is often considered the holy grail of achievement. But in reality, it’s not often the people who get there first that have the best long-term success; in the competitive landscape of technology being a fast follower is often more advantageous than being a first mover.
First mover myth
The term “first mover advantage” was coined in an academic paper in the late ’80’s by Stanford professor Marvin Liberman. It was popularised throughout the ’90’s, just in time for it to become the unofficial mantra of the first dot-com bubble. VCs would push startups for growth at all costs, to “get big” before anyone else has had a chance to copy them.
Twenty years on it’s clear that more often than not, those who were first to market were most likely to fail, and those who closely followed had more long-lasting success. Does anyone remember goto.com? They are widely credited as the first PPC search engine to hit the market. Goto.com launched in 1998, Google didn’t launch its PPC service Adwords until 2002 but quickly overtook every other player in the space to become the dominant service. Goto.com eventually sold to Yahoo for $1.6billion (not a bad payday), but Google’s 2017 advertising revenue amounted to over $95billion.
If being a first mover isn’t all it’s cracked up to be what’s the alternative?
Fast follower advantage
Fortune favours the brave, but fortune also favours fast followers. Innovation is all about failing fast and learning, but no matter how lean you are, that process is costly. The key to great imitation is to learn from everyone else’s mistakes. First movers often enter a market without fully understanding their customer problems or how their solution actually solves problems. By not falling into the trap of those who came before you, and by building on their successes and failures you can quickly build market share.
The first social network was a site called Six Degrees, Facebook launched seven years later. The first MP3 player was called the MPMan and launched in 1997, the iPod launched four years later. You get the idea…
Saturation occurs quickly, and ROI decreases over time
This idea doesn’t just occur in product and service innovation. In marketing, being a fast follower is a massive advantage. The first mass marketing email was sent in 1978 to 400 recipients – it yielded the equivalent of $79million in sales. As the internet came into being, those that followed suit and used email for marketing saw incredible results. Nowadays the idea of any business not doing email marketing seems mad and our inboxes are clogged because of it. Email is still considered the workhorse of marketing but the ROI of the channel is nothing like it was in those heady early days.
If you’re a fast follower in marketing today you’ll know that chatbots are generating returns akin to the early days of email. Many of the early adopters of chatbots are electing to do away with having a traditional website and relying solely on AI-driven bots within chat platforms to do business. While the median ROI of email is 122%, chatbots are regularly generating returns of 400% for businesses that employ them. If you’re in marketing, spotting trends and testing them is fundamental to the job.
Imitation is everywhere
It would be easy to lament the fact that world’s pioneers are being ripped off left right and centre. But the simple truth is that imitation is part of the process of innovation, and it’s impossible to separate one from the other. JK Rowling’s Harry Potter series borrows heavily from the likes of JRR Tolkien and Jill Murphy, fashion retailer Zara is known for its ability to imitate a catwalk design and have it in stores within a month. Copying someone else without providing any additional value is wrong and is rightly protected by patent law. But ideas are only part of the story, success comes through excellent execution. Good imitation creates a competitive environment which forces the evolution of products and ideas, which surely is a good thing?