One of the biggest myths running around the web and tech industries today is the idea of ‘first mover advantage.’
Take a walk with me down memory lane:
Booklink. First book store on the web. Early 1990s.
AOL acquired in 1994 and it got lost in the mix of the online service.
=> Amazon crushed it.
GNN. First web directory. Early 1990s. GNN?
Global Network Navigator, launched by book publisher O’Reilly (hello to Dale Daugherty over there) and sold to AOL for $11 million, a then unheard of price for a ‘home
page.’
=> Yahoo came along later and beat it.
HotBot. First meta search engine. Mid 1990s. Run by Wired’s HotWired. One box front end as it is today pretty much.
=> Alta Vista, Lycos, Infoseek and finally today Google beat it. Compuserve. First online service. 1969. Owned by H&R Block. Yep, the tax people.
=> Compuserve had millions of subscribers when AOL was still called ‘Quantum Computer Services’ and had a few thousand subscribers to a DOS-based system based on a BBS (bulletin board service, these are what geeks did to network before the web).
Mosaic. First commercial browser 1994. Became Netscape Navigator.
Deluge of browsers sprouted including Spyglass Mosaic, SPRY Mosaic, Netcom NetCOMPLETE, Quarterdeck, Netmanage Chameleon.
=> Microsoft licensed Spyglass’s browser and launched Internet Explorer 1995. 1999 it had dominant marketshare.
Delphi. First online service to offer Internet mail access.
=> Acquired by News Corp.
Real Audio. First audio software player for the web. Mid 1990s. Progressive Networks (now called Realnetworks) launched this. Later came out with Real Video, then Real Player.
=> Microsoft licensed the code and created Windows Media Player, now the dominant player for audio/video, bundled with Windows.
IBM PC. 1981. First IBM-based PC.
=> by the late 1980s and in the 1990s Compaq, HP and others beat it. By late 1990s and 2000s, DELL crushed all of them with a better supply chain and relationship direct with customer.
Lessons: Time and time again first does not guarantee winning. The real strategy is to be something I call “best mover advantage”. Best mover can be first, middle or last — doesn’t matter what the placement is.
You want another example? Apple lost the PC war decades ago due to pricing its PC too high and limiting its licensing. Fast forward two decades and Napster launched the online music business, peaked and died and got resurrected.
Meanwhile, Apple finally figured out its “real” business is making cool gadgets for any platform (not just PCs) and launched iPod and iTunes. iTunes becomes the #1 online music store in weeks. And the iPhone has become the most-popular smartphone in the world, with a new 3G S coming out in the U.S. this week (already sold out).
Companies that talk about their strategy and business need to think about being the “best mover” not the “first.”
Being best mover is why Google even exists, long after a truckload of search engines had come along, gone public to the tune of hundreds of millions, and fizzled while drinking their own Kool Aid.
Steve, I guess, you left no stone unturned to agrue that, “Best movers beat first movers”. Well, look at the American Automobile Industry, they got crushed by their japanese counterparts on their own turf. Best move, deep strategies- customer friendly and economical(in an era when gas prices are soaring), is what made ‘em the kings of automobile arena. Several great actors in hollywood did’nt start with big hits, they slowly strategized their best moves in the industry. Microsoft, like you said, wasn’t a first mover but made it BIG. Facebook for that matter, wasn’t the first social networking site, however, it seems to become the next giant. There are tons of such examples and I concur with you about the best movers.