The early bird gets the worm but the second mouse gets the cheese.
The common phrase “the early bird gets the worm” is normally given as counsel to be early or prompt. In entrepreneurial and business circles, it’s also a reminder that the first business to enter the market with a given idea has a big advantage.
That advantage is so powerful that, of the handful of classic entrepreneurial strategies that work, being the first to market is the first one that many of us think of. You can’t just be the first, though; you have to be the first with the most or, as Peter Drucker would say it, “the Fustest With the Mostest.”
However, being the first business to market is as perilous as it is popular. All too often, the company that actually prospers isn’t the one that’s first to market but the one that truly works the opportunities created in the new market. Thus, a second winning strategy: being the second business with the capability to coax the opportunities that the first business can’t or won’t.
As with any strategic decision, there are advantages and disadvantages to either route. Let’s start with being the early bird.
Soaring or Flailing as the Early Bird
The main idea in being there first with the most is that you go first with the idea, lead with it, and put as many resources as you can into both innovating and delivering whatever it is and dominating market share.
Advantages of Being the Early Bird
There are at least three different advantages to this particular strategy.
1. There are no competitors to contend with.
You get to both define and play the game all by yourself, which is a supreme advantage. Prospects aren’t vetting your value proposition against any other competitor on the same dimensions, so it’s a lot easier to come up with a compelling unique value proposition.
2. The innovative edge is inherently motivating.
Doing something that no one else is doing or has done before taps into a core drive for many people. As much as innovators and engineers love to solve problems, they get really fired up to solve new problems.
3. You have the market lead once competitors do enter.
New entrants have to play the game on your turf, and we all know that the home team has the advantage. Rolling out with something new is far more compelling than being the new people rolling out something that used to be new.
Disadvantages of Being the Early Bird
That all sounds pretty nice, but let’s take a look at the disadvantages of the early-bird strategy. Here are a few:
1. Novelty can be hard to sell.
Novelty is a bit of a double-edged sword; as Geoffrey Moore illustrated brilliantly in Crossing the Chasm, broad segments of the market have a bias against novelty and are waiting for the innovation to be tested. They don’t want to waste their money and time on something that may not work.
2. Most people resist change.
If you’re coming up with something new, you have to advance why this new thing is a better solution than currently available (and tested) solutions. Remember, better trumps new every time – though clever marketing can alter the dimensions of “better.”
3. Being the early bird is expensive.
You bear the learning curve in both the development of the idea and the best ways to get it to market. You bear the infrastructure setup costs. And your marketing team has to work harder to shift values and build trust.
4. You’re the plow that opens new ground.
This disadvantage is more than a summary of the first three – it points to the fact that you create the very conditions for other ventures to beat you.
5. Most entrepreneurs can’t stick the landing.
They can’t complete the idea. They can’t execute on it. They won’t do the hard work of the follow-through. They can’t market and position the product in the best ways since they’re too busy developing it.
Aside from capacity, though, many entrepreneurs can’t stick the landing not because of aptitude but because of attitude. For many entrepreneurs, the venture is no longer fun once it starts turning into something that looks suspiciously like a business, so they check out and start the next best thing.
There are no free lunches when it comes to strategy, meaning that you can’t reap the fruits of a particular strategic choice without accepting the disadvantages of that choice.
Methods, tactics, and best practices may show no downsides, but strategies always do. (Click to tweet – thanks!)
Let’s take a look at the advantages and disadvantages of being the second mouse.
The Way of the Second Mouse
Being the second mouse isn’t nearly as sexy as being the business that comes up with the great new idea, but it’s often the most profitable and least risky way to rise to the top. The trick is knowing where and how to piggyback – and how to capitalize on the right opportunities that the early bird can’t harness.
Advantages of Being the Second Mouse
Here are a few advantages of being the second mouse:
1. You can follow in the wake of the market leader.
The back end of the plow gets the least wear. The early birds have done a lot of the hard work of opening new markets and breaking new ground. Your strategy can be as simple as listening to the feedback they’re getting and using it to guide what you’re going to do.
2. You can pick niches and segments of the market that the leader can’t reach or can’t develop quickly.
The leader is spending a lot of time on innovation, distribution development, and marketing, probably while being stretched thin. These tensions create a slew of opportunities for the observant second mouse.
Maybe the leader is going to the high end of the market and there’s a huge opportunity for cross-purposing and getting volume sales on the low end. Maybe the leader is sticking to the low end or the mass market and there’s a premium option available that they’re just not cultivating. As the second mouse, you get to pick which niches and segments you want to go after and you can piggyback off of this new market demand.
3. Being the second mouse switches the costs from innovation and delivery development to operations and marketing.
All the resources that the other business is putting into developing their idea can be put on directly into marketing and delivering whatever it is you’re doing.
Disadvantages of Being the Second Mouse
And now, the disadvantages of being the second mouse:
1. The market leader has a lead in innovation, practice, and mindshare.
This might also mean they have government-facilitated dominance through patents, copyrights, and trademarks. Market leadership is more than just the time they’ve been working the market.
2. Your entrance into the market and cultivation of the innovation validate the need and promise of the first company.
Ironically, you’re actually helping the first company with getting the product out there and validating it as a solution. The more entrants that follow the early bird, the more they validate the efforts of the early bird. Obviously, piggybacking can backfire on you unexpectedly.
Which Should You Be?
Largely speaking, you have to determine where you sit in a given entrepreneurial ecology. If the idea’s already out there, then by default you can’t be the early bird, though better marketing can make it seem like the product was your idea. Remember, Apple wasn’t the first company to come up with an MP3 player, but they marketed and packaged it better, as well developing a convenience-based locked-in ecosystem through the iTunes Store.
As you can tell from above, though, all is not lost if you’re late but innovative. Perhaps you can pull an Apple and market or package the innovation differently. Maybe you see a new social demographic or trend that the market leader hasn’t accepted yet; this strategy worked well for Amazon. Maybe you can take a technology and make it simpler like the FlipCam did. Perhaps there’s a service that can follow a product or a way to productize the service. Or maybe your brand will resonate more with a different segment; rather than being yet another twenty-something social media consultant, you could go all the way by leveraging your experience and maturity and connecting with an older audience. (Who’s teaching Grandma how to use Facebook? Somebody, please help her!)
In short, if you’re going to be the early bird, go all the way and stick the landing. If you’re going to be the second mouse, piggyback where you can, and differentiate or re-segment when it’s ripe.
Think about your business. In what ways might you be the early bird and how might you ensure market leadership? In what ways might you be the second mouse and how might you carve out sustainable and profitable niches within your space?