The Second-Mover Advantage
August 7, 2009
As an entrepreneur, it seems a lot of focus is placed on finding that unique, fresh and innovative new product or service. It’s a daily battle coming up with new ideas only to find with a quick Google search someone else is already way ahead of you on the idea. When I find my idea isn’t perfectly unique, I usually don’t chase the idea any farther than simply thinking about it, because I know I not only have to create an incredible product or service that people will use, but I am starting out of the gate with a major competitor(s).
Despite the challenge, being a second-mover has it’s advantages. A second-mover has the advantage of seeing exactly what the first-movers are offering and able to determine what is working and what isn’t. In this situation, the first-mover will be slower to act. If a first-mover company recognizes the real value of their service after gaining a large following, and they haven’t built out their product or service towards those value-adds, they are in trouble. As a first-mover’s customer base becomes larger, their company will become more resistant to change and less able to quickly implement new products and features to better suit the market. If they attempt any substantial changes to their offering, they risk losing customers. Being a second-mover, one may have the advantage of breaking down the market’s needs and hurts easier than the first-mover. Being able to address these specific needs at the onset allows the second-mover to build their offering in a way that re-addresses the core needs of the market. When implemented correctly, the second-mover will be able to start pulling market share from the first-mover. Sometimes applying a first-mover’s overall idea to a particular niche can be an effective strategy.
Don’t get me wrong, there is nothing easy about being a second-mover and there are plenty of convincing advantages of being a first-mover. By studying the first-mover to see what is or isn’t working, having a clear understanding of the market’s needs that aren’t being addressed by the first-mover, and having an offering that directly addresses the actual needs of the consumer, one has a good shot at creating something successful as a second-mover.
In the social networking world, new services pop up daily. With sites like MySpace and Twitter that become households names seemingly overnight, these giants are in the spotlight, have a huge user base and are finding it harder and harder to change their product direction. There is an incredible post titled “MySpace is to Facebook as Twitter is to _______” that breaks down how Facebook’s second-mover advantage allowed it to over take MySpace and questions who will be Twitter’s second-mover competition. The article inspired this post and I highly recommend the read.
I say all of this to say: even though your initial Google searching of your next big idea results in a long list of first-mover competitors, don’t stop there. Go the next step and see if you can leverage a second-mover advantage to create something successful.
What are your thoughts on being a second-mover?
