Steve Jobs: 'The Half-Truth of First-Mover Advantage' | VC Remote Jobs & More
Is Being a 'First-Mover' a Competitive Advantage? - From Steve Jobs
👋 Hey, Sahil here! Welcome to this bi-weekly venture curator newsletter. Each week, I tackle questions about building products, startups, growth, and venture capital! In today’s newsletter, we deep dive into -
Today At Glance
Deep Dive: The Half-Truth of First-Mover Advantage.
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TODAY’S DEEP DIVE
The Half-Truth of First-Mover Advantage
Being first in the market is often seen as a competitive advantage, but how real is this competitive advantage? For example, do you have to be first – new product, new service, new market, etc?
Moving quickly and striving to establish your business as the ‘go-to’ product/solution in a new market (or niche) sounds like a competitive advantage, but the reality is often very different.
What History Taught Us
If you study any new industry or market, you will find that most pioneers didn’t build truly great products/services/companies, incumbents did!
For Example
Apple was relatively late to the smartphone market. Blackberry, Nokia, and Windows had at least five years of a head start on the first iPhone – released in 2007. Note: By 2009, the iPhone surpassed Blackberry sales.
White Castle had over a decade head start on most hamburger chains but failed to capitalize on it – leaving Ray Kroc and McDonalds to revolutionize the fast-food industry.
Chrysler, Ford, GM, Honda, Nissan, and Toyota all released an electric car in the early 1990s. Tesla didn’t release its first car (Roadster) until 2005. A decade after traditional automakers already had their electric cars on the road.
Facebook was not the first social media site, Six Degrees was in 1997. Facebook didn’t launch until 2004.
When Compaq released their “portable” PC (laptop), there were at least 15 other offerings at the time, but theirs was the first to run software built for IBM.
We can list examples of companies failing to take advantage of being first in the market. Some will argue that timing is the main reason why so many pioneers failed to dominate the market.
Timing Is Definitely An Important Factor, But It Is Not The Core Reason – Execution Is. More specifically, excellent product/service execution and great marketing execution.
Steve Jobs’s iPhone, for instance, didn’t become a huge success because it was the first smartphone, but because of excellent product execution (an industry-first 3.5-inch touch-sensitive screen) and extensive marketing to promote it.
On the marketing side, it started with a promise from Steve Jobs, “A device that will deliver all the features of iPods as well as the smartphone.” Creating a lot of excitement well before the first-generation iPhone was revealed to the masses.
The next logical step for Apple was to reach out to influencers (e.g., reporters, reviewers, experts, etc.) to critique the new iPhone. Unsurprisingly, most publications and reviews were favourable, describing the first iPhone as a “breakthrough” device.
So it was all down to a great device? No.
While it had a great design, the iPhone had many adaptation challenges that marketing had to overcome. For example, it had a substantial price tag of $499-$599. At that time, higher than most of its competitors.
Second, customers had to sign up for a two-year contract with AT&T (using a slower EDGE network and not 3G which was faster and available at the time).
While acknowledging these challenges, Apple’s marketing team focused on its unique selling proposition – an industry-first 3.5-inch touch-sensitive screen. As is the case with any significant product launch from Apple, marketing had a healthy budget for television, print, and web ads.
Lessons Learned
Of course, your business doesn’t have Apple’s resources, but that’s not the key takeaway.
The lesson to learn is that execution (product + marketing) is far more important than being the first to the market.
In many ways, your organization is better off entering the market second, third, or even fourth. Why? A road to new markets (innovative products/services) is paved with mistakes and lessons learned. Expensive lessons that your company can avoid if you pay attention.
For example, being first to the market means educating potential customers on the new product/service – a very time-consuming and expensive marketing exercise. Let the pioneers do that for you.
Summary
As we illustrated in our examples, being first is not always best.
Being a few years behind is often a better, more successful approach as long as you nail your product/service and marketing execution.
Lastly, not being first will give you more time to build that great product and secure the necessary marketing funds to support it.
FEATURED TWEET
Sequoia Capital's 'Pitch Deck Slides' Format For Founders
In fundraising, the pitch deck plays a crucial role in securing meetings with investors. Without a meeting, you have no chance of getting funded. Many founders create pitch decks with 20 or more slides, and this is where some founders fail to even receive a single call from investors.
We have shared a 10-slide format for the pitch deck that every founder should follow….Read More Here
Join 13,500+ Founders, Investors and Startup Enthusiasts Getting Tactics To Build, Learn and Implement About Startups and Venture Capital.
THIS WEEK’S NEWS RECAP
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That’s It For Today! Will Meet You on Thursday!
Happy Tuesday! 🥂
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✍️Written By Sahil R | Venture Crew Team