First Mover vs Fast Follower – Who wins?


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Before exploring the reasons for success or failure lets review a list of innovation leaders and fast followers.

  • AltaVista -> Google
  • Napster -> iTunes
  • VisiCalc -> Lotus 123 -> Excel
  • Word Perfect -> Word
  • Netscape -> Internet Explorer
  • Apple Newton -> Palm Pilot -> Blackberry
  • IBM PC -> Compaq -> Dell
  • Double Click -> Google Ad Sense
  • Ofoto -> Flickr
  • Compuserve -> AOL -> @Home -> Comcast & Verizon

All of these companies were innovation leaders and market leaders. Yet, they were eclipsed by fast followers, in some cases multiple times, who imitated their innovation. My belief is that the technology was outstanding…the management was not.

In nearly every case the early innovators were eclipsed by fast followers. Why did the fast followers take over market share leadership?

  • Better business model (Google, Ad Sense, Dell)
  • Better market position (Word, Excel, Comcast, Verizon)
  • Better timing (iTunes, Flickr)
  • Better platform choices (Blackberry, Word, Excel)
  • Better management (all the fast followers)

The list of "fast followers" above are more than just imitators. They have continued to innovate far beyond the original idea or feature set and have maintained market leadership. If you look closely at these companies they have a  mix of technical visionaries and business management leaders. It takes a different set of skills to start a company than it does to sustain a company. This balance of skills, I think, is the key to sustained market leadership.

Lessons for entrepreneurs;

  • Never stop innovating
  • Build a well rounded management team early
  • Value sales and marketing talent as much as technical talent
  • React quickly to disruptive technologies or business models
  • Don’t be too proud to imitate when it makes sense
  • Beware of platform shifts that look like minor inferior choices
  • Most early innovators get beat by platform shifts, not direct competitors

For the original article goto http://dondodge.typepad.com/the_next_big_thing/2010/10/first-mover-vs-fast-follower-who-wins.html

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2 thoughts on “First Mover vs Fast Follower – Who wins?

  1. Good table showing the juxtaposition of first movers to fast followers. I just blogged about the same idea as applied to our business also, where we contracted in the wake of a tougher negotiating peer and leveraged a certain momentum to get more out of our follow up contract than they did with their first place finish.

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