Don't look for first mover advantage
Parables, cliches, and axioms are wonderful things. They tend to exist because they tend to reflect generalities that have been tried and tested through time. So, it goes without saying that the tortoise does win the race against the hare, and the guy who doesnít have first mover advantage tends to have the best shot at avoiding the mistakes, and expectations, of the guy who jumped to market first.
Microsoft didnít invent the OS, Google didnít invent search, Facebook didnít make social networking, and Apple didnít come up with WIMP, digital music, or mobile phones all on its own. Every entrepreneur looking to succeed should think seriously about how far ahead of the curve they want to be these days.
Now, I know that the money guys like to see first mover advantages, paradigms shifts, and things that are disruptive, but thatís likely to be less of a concern in a down economy than solid growth, cost management, and proven market opportunity. Now is not the time to think about change. Leave that to the politicians. Anyhow, I suspect that those terms mean something different to VCs: Be different, but not so much that no one gets you.
I know. Itís hard to step off the hype wagon and assume pragmatic stances, but you can be an entrepreneur and shrewd all at the same time. It really isnít that difficult. Just put yourself in the shoes of someone who isnít spending all of their time doing what you are doing.
And thatís the key: what would your average customer/client/user/viewer be looking to do these days? Theyíre probably likely to be a little nervous about spending, very concerned about value, and a little involved in self-preservation. That translates into less interest in being swept up in the tide of history or innovation, and therefore, wary of new stuff that is too new.
New stuff that does the familiar better, or provides added value, or benefits Ė thatís going to work just fine. Innovation is a nice word, and sounds great, but people donít buy innovation. They buy a benefit or a resource or a service. Frankly, if someone came up with a horse that could run at a 120 mph, could live in the garage, and lived off of Fruit Loops thereíd be a lot of people whoíd be willing to ditch the innovation of the internal combustion engine.
But, I digress. I may be phlegmatic because the areas that interest me most Ė digital media, consumer facing, online Ė are rife with start-ups and want-to-be-start-ups who have replaced the need for common sense business practices with Field of Dreams scenarios built on advertising revenues. Take a look at this article by Hank Williams. Pay particular attention to his take on building small businesses.
By the way, does anyone actually read fables, or Poor Richardís Almanac anymore?
Omid Rahmat was CEO of Tomís Guide Publishing, which was sold to a European publishing house in 2007. Presently, he resides in Thousand Oaks, where he is working on Why Be Happy, a new online publishing company.