3 second-mover advantages: benefits of late market entry

Three advantages of a late market entry strategy · Customers can be serviced better. · Product gaps can be seen more easily. · Acquiring customers ... Skiptocontent Blog WorkWithMe MyCourses MyBooks WPRecommendations ContactMe SENDMEANOTE SCHEDULEACALL SUBMITAGUESTPOST TwitterFacebookLinkedInThestressofnotbeingamarketpioneer Let'stalksecond-moveradvantages.Itcomesupregularlywhentalkingwithpeopleaboutnewproducts.EspeciallyintheWordPressecosystem,peopleregularlyaskthequestion. Areallthegoodproductideasalreadytaken? Theunderlyingassumptionisthatonceasingleproductexists,oronceagreatproductexists,thatthereisnoroomforanyoneelse.Butit'snottrue,isit? Marketpioneers—thefirstmoverinamarketthatcreatesanewandcompellingoffer—areawesomeandtheygetalotofbenefitfrombeingearly.ThinkCoca-Cola. Butwealllikevarietyandchoice,right?Wewantmorethanonekindofcar,morethanonekindofhotel,morethanonekindofcoffee.Thestressofnotbeingamarketpioneerisreal,butsomethingweshouldn'tstressabout.Especiallyifit'ssomethingthatcan'tbehelped. Myanswer,incaseyouwondered,isalwaysthis: No,thegoodproductideasaren'talltaken.There'stonsofroomtoinnovate. NinjaFormsleveragedsecondmoveradvantage IntheWordPressspace,Ioftentalkabout NinjaForms—acompanythatappearedintheWordPressecosystemyearsaftertherewasaflagshipproduct(GravityForms). In2011Iwastellingpeoplethattheonlyplugintobuy—ofallthepluginsoutthere,notjustformplugins—wasGravityForms.Itwasacategorycreatorandwinner.PeopletoldtheNinjaFormsfolksthattherewasnoroomtostepintothespace.Andthatwasafewyearsago. Butthenyou'dhavetolookattheirgrowthin2015&2016–yearsafterGravityFormshadtakenthatcornerofthemarket.Inaperiodof18monthstheywentfrom200kinstallstoover700kactiveinstallations.That's350%growth.In18months!Yearsafterpeoplehadheardofandwereusingacompetitor'sproduct. WPFormsleveragedsecondmoveradvantage Youmightthinktheformbusinessendedthere–withNinjaFormssteppingintoamarketownedbyGravityForms.Butitgetsevenmoreinteresting. YearsafterNinjaFormswasawell-knownname,rightasNinjaFormsgrew350%,WPFormssteppedintothemarket. Youmightthinkit'sacrazyidea.Wanttoknowwhat'scrazy?WPFormsnowhasmorethan4millionusers. There'salwaysroomforanewanddifferentiatedproduct. Thedefinitionofsecondmoveradvantage WhenItalkaboutasecondmoveradvantage,I'mreallytalkingaboutenteringthemarketaftersomeoneelsehasdefinedtheplayingfield.Youmightenterrightaftersomeoneelse(afastfollower),oryoumightenterafterseveralplayershavearrived(latemarketentry). Here'sthegoodnews:whenyoudon'tenteramarketasapioneer—whetheryou'reafastfolloweroralatemarketentry—youcanenjoyseveraladvantagesthataren'tavailabletothefirstmovers. Thesecondmoveradvantageeliminatesthehighcostsandrisksoffindingproductmarketfit. YouspendlessonR&DYouspendlessonmarketeducationYoudealwithlessriskofproductacceptanceYou potentiallyspendlessoncustomeracquisition Thetruthisthatyoudon'thavetobefirsttofindsuccess. AsValaAfsharremindsus,Googlewasn'tthefirstsearchengine. .@googlewasthe21stsearchenginetoentermarketin1998.Knowyourcompetition,butdon'tcopythem.#CES2017pic.twitter.com/kSYEaaBDKI—ValaAfshar(@ValaAfshar)January7,2017 Googleisn'ttheonlyexampleofalatemarketentrythatendeduphavingtonsofsuccess. Threeadvantagesofalatemarketentrystrategy Therearealotofreasonswhyenteringamarketlatercanbebeneficial.Herearethree. Customerscanbeservicedbetter. Whenevereveryoneismadattheleaderinthespace,butisn'tswitchingbecausetheswitchingcostsaretoohigh,ortherisksaremorethananyonewantstotakeon,alatemarketentry hasashot.IheardthefounderofStripe(whichIlove)talkingaboutwhatmadetheminitiallysuccessful.Hetalkedabouttone,emailsanddocumentation.Iagreedwithallofit.ButIwouldhavestartedwith,“Weweren'tPayPal.” Productgapscanbeseenmoreeasily. Ifthereareacoupleofplayersinthespacethatoffersimilarproducts,therearelikelysomethingsthateveryonehastakenforgranted.Customershavecometolearnthatthisisjustthewaythingsare.Untilsomeoneinnovates.Butthatinnovationoftenrequiresseeingthegap–andthat'seasierwhenyou'renotthefirstmoverwhocreatedthecategory.AirBnB‘srefundpolicy isano-brainernow,butVRBOdidn'thaveanythinglikeitforyears. Acquiringcustomerscanbecheaper. Imaginebeingthefirstpersontosellatelephone.Howdoesthatpitchgo?Whenyou'retryingtosellanewproductthatrequiresyoutoeducateamarketinordertodoso,you'llhaveahighcostofsale.Whenyouarrivetothemarketaftersomeonehasalreadydoneit,it'salotcheaper.Oneofmystartupswasapioneerthatsimplyranoutofmoneyeducatingamarket,anditallowedotherstostepin,thankus,andtakethemarketwe'dtrained.Thatwasapainfulandcostlylesson! Howtoleveragethesesecondmoveradvantages There'sabookIenjoy,mostlybecauseofthestories,thathasaframeworkofquestionsthatIappreciate,calledBlueOceanStrategy.Don'tworrythatitsuggestsyouhavetodothisinanuncontestedspace.Ifindthatthequestionsareworthaskingevenwhen,andespeciallywhen,you'resteppingintoamarketwherecompetitionexists. Whatwillyoueliminate? Aretherefactorsthathavebecomecommonplaceinyourspacethatyoucaneliminatecompletely?Justbecauseeveryoneelseisofferingit,mustyou?Whatifyoutakeitawayfromyourproductcomplete?Itcouldloweryourcosts—whichcouldincreaseyourmargin. Whatwillyouintroduce? Aretherecompletelynewfeaturesthatyoucouldintroducethatnooneisdoingrightnow—forwhateverreason?Sometimesyou'lldiscoverthatenteringthemarketlateallowsyoutocreatesomethingthatothershaven'tbeenabletobecauseoftheirexistinginfrastructureorapproach. Whatwillyoureduce? Aretherefactorsthatyoucanreduce—whetherthey'refrictionpointsorcostlyattributesofyourproduct–thatyoucanadjust?AlotoffolkspunttopricingbutIdon'trecommendthat.Becomingalow-pricedleaderishardwork. Whatwillyouimprove? Aretherefactorsthatarefrustratingpeoplethatyoucanimprove?Whatfactorsdemandanimprovement?Asyoustepintoamarketlate,yourapproachmayallowyoutoimprovethingsfarcheaperorfasterthanexistingplayerswhoarelivingwithexistingconstraints. BuildinganewSaaSorPlugin?Chooseyourcategorycarefully. OneoftheproductsI'verecentlydiscoverediscalledBento.It'sanincredibleproductthatletsmedopersonalization,evenwithanonymousreaders. Butwhatisit?IsitaCRM?IsitMarketingAutomation?IsitPersonalization? Oneofthetoughestchallengeswhenyoucreateproductsisknowingwhichcategorytoputyourselfin,becausethemomentyoudo–youtakeontheexpectationsforthatspace(goodorbad). Butthisisalsowhereyoucanenjoysecondmoveradvantages–becauseifyousayyou'relikeHubspot,anddeliveratonofvaluethat'sonpar,butchargelessthan$100/month–you'recreatingsomesignificantcontrast. Signupforfreecontent.Peoplestilldothat. Thousandsoffolks(7000+)regularlygetmypostsintheirinbox.Forfree. Thanks!Nowcheckyouremail. Therewasanerrorsubmittingyoursubscription.Pleasetryagain. EmailAddress Signmeup! Wewon'tsendyouspam.Unsubscribeatanytime. PoweredbyConvertKit TwitterFacebookLinkedIn #ProductPositioning#WordPress InsideThisPost 1. Thestressofnotbeingamarketpioneer 1.1. NinjaFormsleveragedsecondmoveradvantage 1.2. WPFormsleveragedsecondmoveradvantage 2. Thedefinitionofsecondmoveradvantage 3. Threeadvantagesofalatemarketentrystrategy 3.1. Customerscanbeservicedbetter. 3.2. Productgapscanbeseenmoreeasily. 3.3. Acquiringcustomerscanbecheaper. 4. Howtoleveragethesesecondmoveradvantages 5. BuildinganewSaaSorPlugin?Chooseyourcategorycarefully. 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