About 10 years ago I ‘coined’ the phrase “Don’t invent, Market!” in my first company, DSNR. Even today I can see it each time I visit our offices when it comes up at the end of our corporate video. A similar phrase crossed my path a couple of days ago that made me start to think about it again, it was “Don’t be the first mover, be the fastest follower!”. It struck me how many times I have met with entrepreneurs who ignored this in their quest to invent something. Me, I like to be a distant second… as long as I’m there!

Okay, but what does it mean “the fastest follower”? Here are some examples of companies that started first and finished last:

  • Operating system: CP/M was first and lost to MS-DOS
  • Search engine: Alta-vista was the biggest search engine years before Google
  • Browser: Netscape had over 90% market share and then came Internet Explorer, do you use Netscape?

These were merely three examples of companies who lost their seniority to faster followers. I’m sure you can think of a dozen more, feel free to add them in the comments below.

Unfortunately we are raised to believe that being first is paramount, winning is everything losing is nothing and all that other mambo-jambo. History teaches us that this is not always the case. There are many advantages to being second, even without the glory of starting as the underdog and coming out on top.

So why be “the fastest follower”?

  1. Educate the market – Being first means that you sometimes need to educate your consumers in doing something differently then what they are used to. This can turn out to be very expensive as most .com companies found out back in 2000. They were trying to educate us in doing things differently and they needed a whole lot of money to do it. #fail. Examples: Pets.com (1998-2000), eToys.com (1997-2001).
  2. Market readiness – Some good ideas are launched when technology and/or user acceptance are not ready yet. It’s like firing the right weapon at the wrong time, whether you do it too soon, or too late, the result is identical. #fail. Examples: Kozmo.com (1998-2001), Webvan (1999-2001).
  3. In with the good, out with the bad – It’s easier to sit on the side lines and look at other companies launch the idea, validate the business model and then jump into the market with your own improved product. You can keep the good stuff of the first mover and leave the bad stuff behind. The examples here would be many companies you know and love today who saw something working somewhere else, and decided to do it better – does wall-mart, Microsoft, Apple (yes, Steve Jobs too) and Google ring a bell?

Disclaimer: There are plenty of “first mover” companies that had a huge success. In my opinion, though, when you dig deeper, they are not the rule- they are the exception.