The Fast Follower - Ver: 2.0
With many orgs. gunning for that “first mover advantage” the “fast followers” may still have things working for them…
Ask around & you’d notice how there’s a myth prevalent, one that’s been around for quite some time now. There’s this mad rush to be the first ones to enter a given market so as to be able to:
feed the users with something that could vaguely constitute a solution to a problem
do everything possible to onboard them users onto the product
generate a continuous revenue stream unparalleled to any other
take full control of the proceedings & enjoy a monopoly
reach the pole position & stay perched there
But here are a few straight facts & I know it isn’t just a myth as there’s more to it than a mere fleeting thought or a vague belief.
I have noticed this over & over again during my interactions with PMs & cofounders alike over my mentoring sessions / advising engagements. Blame it on the education system or this mad rush for academic grades, peer & performance pressure that most of us are obligated to deal with it compulsively all throughout our lives, we seemed to carry that as a belief & it seems deeply embedded into our mental molds eventually hampering the structured thought process.
When one can’t completely disagree to the advantage of being the first entrant to the market, getting to capture & work that first-mover advantage in one’s favor, there are ample instances of fast followers taking the market by a storm.
I guess one doesn’t need to look too far. Take Facebook for instance. It wasn’t the first one of its kind trying to work on the concept of zoning in on contacts, acquaintances & the like, bringing them together over an online medium, sharing updates across text / photo / video messages. There were many Apps that happened to see the light of day & in case you didn’t know, here’s a compilation of them:
As is evident from the table above, there were a few Apps that were operating under the same “social media” banner when Facebook was launched in 2004. It is clear that Facebook weren’t the first ones to come up with the original idea. Facebook seem to hit those blinding adoption rates only around 2007 - 2008 which is also when posts like “Sorry Orkut, Facebook is better” got increasingly popular with the latter managing to attract 95+% of the former’s user base.
The one prominent fact to underline here is whatever else Facebook had going for them, they certainly were NOT the first entrants to the market, which is also true for so many other orgs. that have launched successful products. And all of that ought to bring one to analyze:
Is the first-mover advantage that big a thing after-all?
The importance of being a first-entrant & having a disruptive strategy towards setting foot into an underserved market, building something of a solution whilst making it look all magical to them is a great way to think & move forward. But it is not all rosy & could bring some significant challenges with it like:
1. Entry Costs
Given how a new product that’s chiefly advocating an entirely novel way to get stuff done, it would obviously require the org. to spend heavily over a new piece of software, hardware or both thus adding up to the entry costs, something one would have to cough up well before the first launch.
2. Time to Entry
The niche product may involve significant effort in terms of hiring all the required teams contriuting towards strategy, product, design, development (/ manufacturing) eventually bumping up the time it takes for orgs. to get market ready.
3. Chicken-Egg Problem
The launch of a new product would often need the org. to sort out a user base that resonates deeply with the whole idea & buys into the solution as well, requiring the org. to create a market to even be able to soft-launch & test it out thoroughly. But that could also end up looking like a chicken-egg problem given the users needing to buy-in to a solution (/idea) even before it physically exists.
4. High Risk of Failure
The dynamism of the market & changing user needs could significantly drive up the chances of failure given how hypothesis, assumptions, lack of validation at times requiring the org. to prepare for a prototype / MVP / Alpha / Beta-launch so as to enable learning a thing or two about whether or not the solution addresses the problem completely. Yes, one could get the user base to pledge but that can’t be considered foolproof in any sense at all.
So, what’s the other route to the market?
Of course, one could choose to be a FAST FOLLOWER!!
⚠️WARNING: This very thought of being a Fast Follower (as also emphasized by the data in the table above) could so easily be perceived to be advocating Strategy Aping, which simply means to copy someone else’s strategy as-is sans any changes whatsoever. But, there’s a significant difference between keeping a watchful eye on the competition, understanding what is happening over their product, how its being received, gleaning all insight to enumerate gaps using that to work towards a better product offering as opposed to merely copying it with no changes whatsoever.
Definition:
Traditionally a FAST FOLLOWER could be a term to represent an org. that seamlessly copies the strategy of another org. usually a competitor so as to build & launch a product aimed at capturing a portion of that market share, claiming a slice of that pie somehow. Term that “Fast Follower VERSION 1.0”
Now, a better variant of that strategy could be allowing the competition to hit the market with a product first & closely observing them, learning of all the major & minor gaps towards seasoning, refining those ideas & funneling / channeling them back into the strategy, enhancing the roadmap further thereof. This is what I call “Fast Follower VERSION 2.0”.
To turn any strategy into a winning one, one ought to be abreast with the advantages & disadvantages & the Fast Follower is not exception in this case. So, lets’ get familiar with it now.
Advantages:
1. Better Understanding of GAPS
To be able to hit even the smallest degree of success over building & launching a product an org. ought to have & work with a deeper understanding of the market, users, their workflow & the GAPS. By choosing to be a Fast Follower an org. allows the competitor to be the first ones to bear the brunt of the market & looking at the proceedings from their vantage point could help identify areas that are still untouched & land on problems that are still unsolved which could land one into solid discoveries if pursued well.
Its possible that some products may be flawless all on their own but analyzing it all from a bystander’s point of view could help land the understanding of it being say, a pricing problem when it may take the org. that created the product a little while to realize the same given how their focus may be different all through.
2. Refined product offering
A solid understanding of the gaps would obviously lead to a better focus for the fast followers which eventually ought to land one a better strategy & even better initiatives that carry rich relevance to the users / markets given that particular point in time. It is possible that the users have tried some (x) product & have a first-hand understanding of their shortcomings. If they happen to get addressed over another product release as a subsequent follow-up, the probability of hitting good numbers over user adopted could improve manifold. Improved Relevance => Improved probability of adoption.
It is all about the right time if one can analyze it closely. Coming up with a product release in competition to the one that was used as a base could make a strong case to seal all the gaps prevalent & it ought to augur well for the fast follower. So, essentially what an org. has done by choosing to be a fast follower is to allow the competition to have a go first and then glen all those inghts factoring it into building better products.
3. Reduce TTM (Time-To-Market)
There are quite a number of phases a product passes through going from inception / ideation to the build (0-1) & then hitting the scaling stage. And understandably each of these stages do take their own sweet time & could never happen overnight. Although the actuals vary, it is customary for an org. to spend a lot of time strategizing / planning the product over timelines / quarters. And that’s given by TTM (Time to Market) which is the time it takes for someone to hit the market.
But being a fast follower could bring with it an advantage which is to reduce TTV substantially. If one is looking to just copy / ape the other’s strategy it could end up reducing it by 80+% although that isn’t recommended. But the ones who onboard onto fast follower version 2.0 train of thought could end up saving 50+% of the time given how they are reliant on insights from a competitor.
Disadvantages:
1. Swept Off Clean
Leaving it all to the competition with an aim to study their moves & then incorporate that into the strategy & then act could end up looking more like a retrograde decision owing to how the competition may be pretty solid over their research & discovery. They could be up & away in a flash if the solution to the problem fits perfectly it could mean a runaway success, to replicate which could never be easy for another org. given the users making headways, adopting the product seamlessly.
Post that, it may take a mammoth effort in terms of the not just the product / the UX but the acquisition of the users which may prove to be pretty costly an affair bumping the CAC significantly, increasing the time it’d take for the Fast Follower to be profitable thus denting the whole business model, rendering it paralyzed.
2. Ensuing Wars
If an org. happens to stick to the Fast Follower Ver 1.0 as a strategy one is bound to come up with a product that’s just as good (/bad) as their competitor from whom it was copied. Given how the products solve the same problems in the very same way, catering to the same segment of the market, one may only be left with the price as a chief parameter to play with & take advantage of.
And that could often land orgs. into price wars just as many competitors have been involved from time immemorial. When whether that could be successful or not makes a pretty worthy debate, who would get their noses in front & stay that way for a longer term could be anyone’s guess. In short, that may not augur well for any org.
3. Myopic Vision
Be it a product / feature however major / minor, what’s perceived as a base for all the analysis, research & discovery may not be all that solid if the competitor is also in there with a strategy to test out some vague hypothesis, which may be the best route given some environmental conditions / constraints. Nobody ever, none of the product orgs. is going to the expose their roadmap to the whole wide world to see given the confidentiality angle & how one could have something of a game-changer up their sleeve. Now, the problem one could be forced to face-up as a fast follower is getting holed out with a myopic vision given how they often look at a competitor’s latest release & make that the very basis for all assumptions, hypotheses, calculations & of course drafting the strategy.
It is said an eagle doesn’t fight any other bird, it just soars higher on the basis of an understanding that the other can’t ill-afford to fly that high. That’s a classic example of playing to one’s strengths. But on the flip side, a feeble idea often tends to carry a miniature scope & is all certainty the result of a myopic vision. Such products may never live to see the light of day, let alone scaling dizzy heights. They would be strangled by that very petty scope & vision.
Final Verdict:
So, you’re here now with one question…
What’s better? Being an early mover or fast follower?
And there’s no universal answer to this as a plain comparison of pitting the 2 against each other. But what’s important is to be abreast with the advantages / disadvantages of either of those strategies, using them effectively over situations as aligned to the goals that matter.
But one thing is surely a given. Strategy Aping aka “The Fast Follower 1.0” isn’t going to get one too far and that’s a fact. If you’re looking at it seriously you’d better onboard yourself onto “The Fast Follower 2.0” bandwagon.