7 ms·

How To Win As Second Mover

33 points by eladgil 14y ago

aidenn0 14y ago
Does the first mover ever win, absent a government sanctioned monopoly?
- eladgil 14y ago
  eBay, Yahoo!, Amazon, Craigs List, are all examples of first movers in their particular markets. In general, I mean "second mover" more generically. I.e. what do you do if someone already has a strong or growing market position? How can you beat them?
  - wtvanhest 14y ago
    eBay - maybe this one, but there was other eCommerce before them. Yahoo! - Definitely not the first search engine, also not a "winner". See Wandex. Craig's List - It may have been first, but it is unlikely it was the first "online classifieds" since it wasn't started unti l998. (I believe 1995 he started an email distribution though). The point is, for every company that is a first mover that we know of, there were usually lots of others started before it that failed. There are a number of academic papers on the subject, one was called something like "First mover disadvantage".
    - acgourley 14y ago
      I think you guys only disagree on what constitutes a first mover. You consider a company who has simply launched as a mover. Although he doesn't explicitly say it, I believe Elad only does so if the company has real traction. Actually your definition of a first mover isn't useful, as very few companies would fit it.
      - eladgil 14y ago
        Agreed. I am implicitly implying a lack of strong incumbents and a degree of real traction rather then "has anyone ever tried anything remotely similar".
        wtvanhest 14y ago
        You guys make good points and you changed my mind. I think you guys took the more logical route on this than I.
    - eladgil 14y ago
      Yahoo! was definitely the first (or amongst the very very first) directories/portals. Directories worked just fine when there weren't a lot of links. That is why for a while, search was viewed as an add-on to portals versus a primary service. eBay was the first online second hand marketplace of any reach AFAIK. I think defining "first mover" becomes a semantic argument at some point. I think Yahoo!, eBay, Amazon, and Craigs List were in situations where there were no strong incumbents and were the first to grow to any scale and that is the key point. The question this post tried to address is "What if there is an incumbent or strongly growing competitor? What can you do?" I definitely agree that the saying "pioneers are often the ones with arrows sticking out of their backs" so am by no means arguing being first is the same thing as winning.
  - kawera 14y ago
    Compubooks was an online bookstore way before Amazon's launch. First they sold through BBSs, then on Compuserve and later on the web but didn't resist Amazon's price pressure and folded during the first bubble. I got several books from then and, If I remember correctly, they were based in Texas.
- chollida1 14y ago
  Microsoft did alright being the first to offer an OS for an IBM PC and the first to have OEM licenses for PC compatible computers
  - jtap 14y ago
    Microsoft is the king of second movers. That's what they do best. Xbox is another great example.
jongs 14y ago
International markets makes sense only if there is a clear path to monetization or the potential acquirer has interests oversees
lazyjones 14y ago
Is Google really "winning" with Android (example in the article)? Sure, they have more smartphone deployments, but are they even earning any money with it? Most likely nowhere near what Apple makes in that market.
- schraeds 14y ago
  $500mm spent trying to sell Motorola phones this quarter alone.
- lquist 14y ago
  Exactly. It's kind of embarrassing how much of the profit pool Apple has. This article (http://tech.fortune.cnn.com/2012/05/03/with-8-8-market-share-apple-has-73-of-cell-phone-profits/ http://tech.fortune.cnn.com/2012/05/03/with-8-8-market-share...), though a bit outdated, show how insanely lopsided this market is: Apple has 8.8% of the market of worldwide mobile phones, yet makes 73% of the profit pool. (An interesting note: Apple + Samsung combined make 99% of the profit pool)!
sopooneo 14y ago
I listened to an interesting podcast (Under the Influence?) a while back about first movers that lost out to their copycats. One famous example? Hydrox cookies. They were the original. http://en.wikipedia.org/wiki/Hydrox http://en.wikipedia.org/wiki/Hydrox
hcarvalhoalves 14y ago
The comparison between iPhone and Android doesn't make sense. iPhone is a particular product, Android is just software licensed to 3rd parties. It doesn't amaze me there are more deployments of phones with Android than iPhones, it's pretty obvious in fact. Android is a second mover maybe if compared to Windows Mobile or other systems licensed to manufacturers.

33 points by eladgil 14y ago

aidenn0 14y ago

Does the first mover ever win, absent a government sanctioned monopoly?

eladgil 14y ago
eBay, Yahoo!, Amazon, Craigs List, are all examples of first movers in their particular markets. In general, I mean "second mover" more generically. I.e. what do you do if someone already has a strong or growing market position? How can you beat them?
- wtvanhest 14y ago
  eBay - maybe this one, but there was other eCommerce before them. Yahoo! - Definitely not the first search engine, also not a "winner". See Wandex. Craig's List - It may have been first, but it is unlikely it was the first "online classifieds" since it wasn't started unti l998. (I believe 1995 he started an email distribution though). The point is, for every company that is a first mover that we know of, there were usually lots of others started before it that failed. There are a number of academic papers on the subject, one was called something like "First mover disadvantage".
  - acgourley 14y ago
    I think you guys only disagree on what constitutes a first mover. You consider a company who has simply launched as a mover. Although he doesn't explicitly say it, I believe Elad only does so if the company has real traction. Actually your definition of a first mover isn't useful, as very few companies would fit it.
    - eladgil 14y ago
      Agreed. I am implicitly implying a lack of strong incumbents and a degree of real traction rather then "has anyone ever tried anything remotely similar".
      - wtvanhest 14y ago
        You guys make good points and you changed my mind. I think you guys took the more logical route on this than I.
  - eladgil 14y ago
    Yahoo! was definitely the first (or amongst the very very first) directories/portals. Directories worked just fine when there weren't a lot of links. That is why for a while, search was viewed as an add-on to portals versus a primary service. eBay was the first online second hand marketplace of any reach AFAIK. I think defining "first mover" becomes a semantic argument at some point. I think Yahoo!, eBay, Amazon, and Craigs List were in situations where there were no strong incumbents and were the first to grow to any scale and that is the key point. The question this post tried to address is "What if there is an incumbent or strongly growing competitor? What can you do?" I definitely agree that the saying "pioneers are often the ones with arrows sticking out of their backs" so am by no means arguing being first is the same thing as winning.
- kawera 14y ago
  Compubooks was an online bookstore way before Amazon's launch. First they sold through BBSs, then on Compuserve and later on the web but didn't resist Amazon's price pressure and folded during the first bubble. I got several books from then and, If I remember correctly, they were based in Texas.
chollida1 14y ago
Microsoft did alright being the first to offer an OS for an IBM PC and the first to have OEM licenses for PC compatible computers
- jtap 14y ago
  Microsoft is the king of second movers. That's what they do best. Xbox is another great example.

jongs 14y ago

International markets makes sense only if there is a clear path to monetization or the potential acquirer has interests oversees

lazyjones 14y ago

Is Google really "winning" with Android (example in the article)? Sure, they have more smartphone deployments, but are they even earning any money with it? Most likely nowhere near what Apple makes in that market.

schraeds 14y ago
$500mm spent trying to sell Motorola phones this quarter alone.
lquist 14y ago
Exactly. It's kind of embarrassing how much of the profit pool Apple has. This article (http://tech.fortune.cnn.com/2012/05/03/with-8-8-market-share-apple-has-73-of-cell-phone-profits/ http://tech.fortune.cnn.com/2012/05/03/with-8-8-market-share...), though a bit outdated, show how insanely lopsided this market is: Apple has 8.8% of the market of worldwide mobile phones, yet makes 73% of the profit pool. (An interesting note: Apple + Samsung combined make 99% of the profit pool)!

sopooneo 14y ago

I listened to an interesting podcast (Under the Influence?) a while back about first movers that lost out to their copycats. One famous example? Hydrox cookies. They were the original. http://en.wikipedia.org/wiki/Hydrox http://en.wikipedia.org/wiki/Hydrox

hcarvalhoalves 14y ago

The comparison between iPhone and Android doesn't make sense. iPhone is a particular product, Android is just software licensed to 3rd parties. It doesn't amaze me there are more deployments of phones with Android than iPhones, it's pretty obvious in fact. Android is a second mover maybe if compared to Windows Mobile or other systems licensed to manufacturers.