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First to market – You sure its a good idea?

June 1, 2009

When I first took an interest in business, it was a time when people swore by a set of business commandments. One of them was the first-to-market commandment.

If you are the first to come out with a product or an idea, the argument went, you have the competitive advantage. You become the de facto industry leader. Traditionally brands spend millions to obtain a leadership position so you go for a clever shortcut – create a unique category and be the first. You know, like creating the first square durian. That’s how you make a blue ocean.

And you might remember that not too long ago, brands prided themselves with being the world’s first this and the world’s first that. “We have the world’s first printer-cum-scanner-cum-photocopier-cum-fax-machine!” they’ll scream. Interesting how people still prefer to buy these things separately after all that chest-beating. 🙂

I’ve lost count on how many early market entrants have come, made a brief and sometimes awkward entrance, and then retreat with arrows on their backs as pioneers are often rewarded with. Yeah, pioneering was a bloody business during the wild wild west days. Trust me, nothing’s changed.

Fast forward to today. From automobiles to soda pop to phones, notice how very few market leaders are actually pioneers of the products they enjoy leadership in. The world’s first commercially sold personal computer was the Altair 8800. Today, HP is the top producer. Ever seen an Altair before? I haven’t.

Believing that first to market = instant market leadership is, IMO, one of the great superstitions in business that still linger to this day, in spite of all the examples that tell us otherwise.

But we’re so trained to react to shock and awe and newsiness its hard not to be tempted. So if you were an entreprenuer, what would you do, race to be first or let the other guy go first?

Well, these are my personal opinions.

I would go first IF I have these few things going for me: (1) When I can create a temporary barrier, perhaps via intellectual property protection, to put a reasonable distance between me and my would-be copycats, (2) when its impossible for me to get info that reveal how an early market entrant is doing, (3) when I know a single product failure will not run me aground i.e. I have a Plan B.

But you know what? Depending on what’s at stake, sometimes I’d rather just let a new kid on the block go into unfamiliar territory and see if he comes back in one piece, or if the market even reacts at all. Sure, people tell me early entrants get the best suppliers, distributors, customers and so on, but they forget one thing. Early birds also have a habit of drawing out the biggest predators who would be circling them like vultures if the “smell” is exciting enough. Nothing beats learning from mistakes at your competitors expense. 🙂

There’s plenty of marketing theories on this but to me, its hard to beat a real history lesson. Look at the leading brands today, especially the johnny-come-latelys, study how they crept into the game and you might just avoid some really painful arrows raining down on your backs.

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2 Comments leave one →
  1. June 1, 2009 10:47 am

    That reminds me of the battle royal between Sony’s Betamax Vs JVC’s VHS

    The betamax vs. vhs battle is a classic. The battlefield for standards is like crowded and noisy boxing ring. Hundreds of interested parties hang at the sidelines waiting to rush in the moment they declare a winner.

  2. June 1, 2009 9:14 pm

    there are still a lot of companies who wan to be the first….and suffer the consequences of becoming the guinea pig.

    and there are some companies who are so scared to be the first, that they will just let go of all the good opportunities and prefer to follow behind the market leader.

    Either one is bad. The main thing here is to know whether it is feasible to be the first or not. Also, remember that idea is jz an idea. if you cannot implement it or market it (convince people to use it), then it is still a failure.

    Yeah, the feasibility study is critically important and from my experience it can also be the main reason why market trials fail. Bad market intelligence being the number 1 reason, incomplete data being the second, and flawed reasoning being third. First to market is always a toss-up but there are ways to get there without losing one’s shirt.

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