FIRST ALWAYS LOSES: Naïve entrepreneur does not get it.

 

Thursday December 2, 2005

 

 

As I concluded my presentation to the Monterey TechNet audience last night, Dick asked the first question – or should I say challenged my contention that “First always loses.” I was pressing the point that building an unfair competitive advantage for a new enterprise requires avoiding being first.

 

My research reveals that pioneers get arrows in their backs. UNIVAC mainframe computers, Visicalc spreadsheets,

Rio

digital recorded music devices, and the list goes on and on. It is a lot easier for a pioneer to follow the wagon wheel ruts on the road to

Oregon

. Just look for skeletons that mark the path.

 

“First mover advantage” is an awful concept – it misleads first-timers. “First to get it right” is what you want. That made the iPod business emerge as the gorilla of its category. And Amazon.com (ecommerce). And Google (Internet search).

 

Races are rarely won by being first off the starting line, especially in a marathon like doing a new enterprise. First starters lose momentum and come in dead last, if not dead.

 

So Dick trumpeted “But IBM was not a startup and they became the gorilla of mainframes. How does this apply to them?” So I responded, “It is simple. An entrepreneur starts something from nothing. You can start a new business for a fresh market inside an established organization. Nokia did that with mobile phones. So did IBM with computers.”

 

So think of “First” meaning “First to get it wrong.” And then be clever: Aim to be “First to get it right.” That is critical to building an unfair advantage. Get it right. Or get out.