Some conventional wisdom says that you need to be first to win. People will point to eBay and Microsoft and Starbucks and the William Morris Agency and say, "if it’s a natural monopoly or a market where switching costs are high, the first person in, wins."
This argument has been amplified lately by the high cost of building a name for yourself (it would cost just too much to build a brand bigger than Starbucks in a post-TV world) as well as the network effects of things like eBay and Hotmail.
Skeptics scream foul. They point out that not one of the examples I gave above was actually the first mover. There were plenty of others that came first, and, they argue, the fast follower won by learning from the mistakes of the innovator. They argue that innovation is overrated and low costs and good service are the key.
I think both sides are wrong (and right) and the mistake is caused by the erroneous belief that there’s a market.
There isn’t a market.
There are a million markets. Markets of one, or markets of small groups, or markets of cohorts that communicate.
If you’re an eBay user, my guess is that eBay was the first auction site you used. If you use Windows, my guess is that you never used CPM. And if you are a Starbucks junkie, my guess is that you don’t live near a Peets.
What happens: the market often belongs to the first person who brings you the right story on the right day.
Yes, you must be first (and right) in that market or this market.
But that doesn’t mean you have to be first (and right) in the universe.
The market is splintering more than even some pundits predicted in 1998 (that would be me). Which means that the idea of monolithic marketing messages to monolithic markets makes no sense. The race is now to be the first mover in the micromarkets where attention matters.
Of course, those micromarkets are leaky. People don’t cooperate. They talk to each other. So pretty quickly, that splintered market coalesces into something bigger.