Second Mover Advantage: Why Being Late Can Be More Rewarding
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Chapter 1: The First Mover Dilemma
While being the first to market can offer certain advantages, achieving that status is often more complex than it seems.
In 2013, Google introduced Google Glass, a head-mounted wearable device. As the initial entrant and backed by Google, one would anticipate it to revolutionize consumer electronics, similar to the first iPhone. However, that was not the outcome.
Google faced a multitude of challenges, including technological flaws, users misusing the device for unauthorized photography, and health issues related to Wi-Fi signals. Ultimately, the negatives outweighed the positives, leading to the product's discontinuation in 2015.
Yet, this did not signify the end of Smart Glass technology. Several companies are now picking up where Google faltered. They are cautiously avoiding past mistakes and are instead focusing on consumer demands while gradually integrating desired features into their products. Consequently, brands like Ray-Ban, Amazon, Snapchat, Bose, and Vuzix have emerged with their versions of Smart Glasses.
Section 1.1: The Advantage of the First Mover
Despite not being the pioneers in their respective fields, companies like Google, Boeing, and Facebook have emerged as industry leaders. Conversely, Coca-Cola's narrative showcases the power of first-mover advantage, transitioning from a mere curiosity in the late 1800s to a globally recognized brand.
Other soda brands have attempted to emulate Coca-Cola's success but lack its legacy and market dominance. Coca-Cola exemplifies how a first mover can establish itself as the industry standard, shaping consumer perceptions and expectations. Brands like Uber, YouTube, and Airbnb have successfully done this, entering the minds of consumers without competition. The first name they encounter often remains top-of-mind, making it challenging for later entrants to compete.
Section 1.2: The Challenges Faced by First Movers
But why might being a second mover prove advantageous? I once collaborated with a brand eager to launch an eco-friendly product. The team was enthusiastic, believing they had found an unexplored niche, banking on first-mover benefits. However, I approached the idea with skepticism.
Initially, they were targeting a small niche. To expand this market, they would need to invest heavily in advertising and public relations over several years without immediate returns. Few companies exhibit the patience to commit to such long-term investment for minimal short-term gain.
First movers must create their market, necessitating significant investments in marketing. Not all companies can afford this. Even if they manage to reach consumers, they face the crucial question: "So what?" While their product may be environmentally friendly, is that a compelling enough selling point?
The company proceeded with the product launch despite my reservations, but it received a tepid response. Interest waned within a year. The product wasn't abandoned but became an afterthought until the COVID pandemic introduced new relevance.
The product's ability to improve indoor air quality aligned with pandemic concerns sparked renewed interest. However, by then, competitors had already developed similar offerings. Some even launched quietly, seizing the opportunity to position their brands effectively in response to COVID. In this instance, the second movers outperformed the first mover.
Chapter 2: Why Second Movers Excel
First movers often establish an image that may not resonate long-term. Competitors can introduce similar products with more relevant branding, making it more challenging for the original company to pivot.
For instance, Polaroids dominated instant photography, and Kodak was synonymous with film photography, yet neither could penetrate the digital camera market.
In conclusion, becoming a second mover allows you to benefit from the groundwork laid by first movers. While there are benefits to being a pioneer, being a strategic and adaptable follower enables you to learn from predecessors' experiences.
Second movers have distinct advantages:
- They face fewer uncertainties by learning from market successes.
- They can leverage existing data for informed decision-making.
- They can collaborate with experts who have already navigated the market.
- They can partner with better-equipped suppliers.
- They typically spend less on marketing than first movers.
Embrace being a second mover, and hope the first mover isn't as formidable as Coca-Cola or Apple.
First Mover Advantage: Why You Should Be First to Market - This video explores the benefits of being the first in a market and the challenges faced by early adopters.
First Mover Advantage vs Late Mover Advantage - This video discusses the differences between first movers and second movers in various industries.