I spend much of my life seeing new products and services online. What I’ve noticed many times is the “me too” creation of similar businesses – such as the amount of daily deals sites currently popping up.
You may roll your eyes and think that the old saying “First past the post” rings true for all successful online ventures, but it’s not. There are dozens of examples and hundreds, if not thousands, of businesses who made their success through improving on an existing idea.
I might be visiting New York next month. That’s when I found the great spare room rental website, AirBnB. This site basically allows introduction of people with spare rooms with people who are travelling. I was looking through the site, and it reminded me of another service I saw quite a while ago, Couch Surfing.
Turns out the founders of AirBnB, with a value of one billion dollars, were inspired by the now lesser-known Couch Surfing, as discussed in this blog post by someone close to the company, Andrew Parker. AirBnB costs money, Couch Surfing doesn’t, yet AirBnB has huge interest and a skyward value, where Couch Surfing doesn’t.
We’ve seen it with Amazon recently buying the more recently started and quickly growing competitor, The Book Depository. Nobody would believe that iTunes was the first music sales service, or Google was the first search engine.
These are some of the great reasons why being second to market is often better.
Research costs saved. The first to market have spent the money in researching demand. This means you donít have to – if the first to market is gaining success and popularity, then there’s likely demand for your product or service too.
Save the marketing budget. Marketing costs money. If you are introducing a new idea, it can be more expensive. If the company before you has already been out there doing the initial consumer education work, then you spend less time having to educate people yourself.
You learn from others’ mistakes. Sure, we all make mistakes too; however learning from others’ mistakes is cheaper. Buy their product, or subscribe to their service, and then tear it apart – what works with it, and more importantly, what makes it harder to buy or use? Don’t make those mistakes.
Improve on their idea. Watch how they are pitching the concept, and find a better way to do it, or a better niche; even subtle differences can have a large impact on your success.
Believe me, I’m not suggesting you should be copying ideas, however if you find yourself building a product or service, and before it goes live, you hear someone else has beaten you to the gate, don’t be despondent. Being second to market can be a great strategy.
As Director of Bam Creative, and Chairperson of the Australian Web Industry Association, Miles spends his time managing his business or speaking about managing businesses. Recently awarded as one of the top Western Australian entrepreneurs under 40 years old, Miles can also be found writing at his blog.