We’ve all been in situations where reseach and design have been rushed (or worse, skipped) in order to get a product to market first. One clear advantage is the ability to patent and potentially lock out the competition. It’s also been suggested that it allows you the opportunity to learn from your first installs and improve in version 2 (this seems particularly conventional in the software world.)
But there are clear advantages to being a “fast follower” and coming into a market with a superior user experience.
How many of you have explored this in depth and have a solid position on it? What are the best case studies for either case?
Here’s a few to get the juices flowing:
First to Market Successes: 3M Post-it
First to Market Failures: Betamax, Xerox Star
Best to Market Successes: iPod, Excel, VHS
Best to Market Failures: Kodak Instant Photo
First Market Failure: Apple Newton
Best to Market Success: Palm V
There is a lot to be said for de-bugging early versions of products, and not just software products. A few years ago, Moen introduced the Pure Touch filtering faucet. It was unique and invented a new category of product. Moen quickly followed with lower priced versions and competitors have introduced me-too products. But Moen still leads the category. The newer, lower priced versions later introduced by Moen also helped evolve the quality of each successive Pure Touch. I suppose that my position is that being first creates a temporary advantage, and that being best requires sustained effort. To do either well requires a superior understanding of human needs and wants.
Your question is so open-ended, it is very hard to take a firm position. I think it really depends on the product being developed. Obviously, if you have a patent to protect yourself, you don’t necessarily have to be the best.
If you are not protected by a patent, trademark or whatever, it then depends on at least a few factors. There is a chart I use with clients that I attribute to Jeff Bezos as the author (I am not sure that’s true, it is what I was told). It is a modified BCG portfolio matrix and is used in evaluating potential products. It is a simple x,y chart with the x-axis is an increasing ease of execution and the y-axis is an increase in business impact. Connect the two axes to create a square/rectangle and divide into four quadrants. The lower left quadrant has Back Burners; they are hard to make and it wonâ€™t gain in the market, no reason to pursue it. The lower right has Low-Hanging Fruit; you donâ€™t get much back but it is easy enough to execute to say why not. The upper right quadrant has the Quick Wins; easy to do great return but easy to copy and it party wonâ€™t last long. What a company wants to focus on is the upper left quadrant, the Must Haves. These have great returns from the market and are hard to develop, the competition will have a difficult time getting into the market and when they do, you may be onto the beta version and increasing your hold.
So when IMO, what is better depends on at the very least a time/ROI analysis along with the pricing strategy of the product - not forgetting first-in holds a large advantage. Sorry I couldnâ€™t be more definitive.
Examples of first-in (some of them are still holding on)
Roche (for PCR genetic testing)
Examples of best (also some of them still holding on)
This is a big question. I voted for First… here’s why:
a) Firsts have to take great pains to be the best, anyway. There are very few Firsts who also don’t make major improvements on version 2. All Firsts know that getting there early doesn’t last long against high performance chasers, especially when lessons can be learned from a leader’s mistakes.
b) A poll of the Bests would probably show that most (if not all) would have preferred to be a First. They know they are capable of good work. It would be nice to get paid for it sooner.
c) Without the First, there can never be a Best. Even though many Bests have bought out a First that failed (often because they were too early or couldn’t keep up with demand), that doesn’t mean there isn’t a windfall in the absorbtion.
I think that products are surface to the top in a rather democratic fashion. Sometimes the first ideas set the stage and rise to the top above other bad ideas. Sometimes, they are only around for a while and then they get passed by better ideas. All firsts will eventually get passed by the bests. It doesn’t take much to make something just a little bit better. In the long run, there is probably more money in sustaining your product as the best, as a opposed to living off the spoils of being the first.
Fast follower: Is that because a great deal of effort is expended in being first, whereas the solutions become more obvious when there is an example to dis-assemble?
Maybe the trick to becoming a Best is to be both a First and your own Fast-Follower. IOW, don’t release V1 until V2 is nearly ready for release… then follow quickly with innovations when the first round of copycats show up… etc.
If the work Golden and Tellis was of any help, you could maybe also look into the studies Abbie Griffin has performed for PDMA on new product development practise. I believe that one of the thing they measure is the strategy used (simplified first to market vs. fast follower).
…tom peters is a proponent of ready-shoot-aim…be both first and a fast follow-upper…i have also read that up to 17% of product lifetime sales can be lost 30 days late to market…however i am informed that, roi is much better as the #2 contender.