We’ve heard of the “first mover advantage,” which essentially says that being the first in a market will establish a company as the leader and help it corner market share. But is that always true? Consider the first line of soldiers in battle. Aren’t they the first to get shot? Being the first in a market isn’t always a good thing.
The Benefits of Being Second to Market
In the book, The Art of Being Unreasonable, by Eli Broad, the author explains why second movers sometimes have the upper hand: “…a second mover can beat the first mover on branding and market share by relying on an unalterable commercial fact: markets evolve. ” Often those first movers are so tired from trying to rush out ahead of the competition that they simply don’t have the energy to keep up with ever-changing technology. That leaves ample opportunity for that second mover.
Broad says that the “Big Three” automakers were all second movers, and that they improved up on existing manufacturing methods and offered a better product. Apple wasn’t the first to create an MP3 player. By letting a leader cut the path to success, your brand can reap the benefits by doing things better and having a less difficult journey.
By not being the first to a market, you also realize cost savings. The first mover is the one who wasted all the money tweaking the product. Now you can see what worked (and what didn’t) and spend smarter to make an improved version of the product.
How to Take Advantage of Being Second Mover
Broad says you shouldn’t put your focus on lowering prices, but rather finding those customers that the first mover isn’t serving.
“Look for needs your competitors don’t satisfy. Look for disgruntled customers who deal with your competitor not out of loyalty but because there’s no other option. Make yourself an attractive alternative,” says Broad.
He also encourages business owners to look at the failures of the first mover to find a shorter path to success. He also says it’s important to just keep moving. Be ready to adapt to changes in the market as they come, and be ready to keep innovating when that third (and fourth, and fifth…) mover shows up.
And know that when there’s competition, your idea is validated. After all, if others think they can make money with a similar idea, you’re onto something big!