The Benefits of Being a “Fast Follower”

by Justin Grensing, Esq., MBA

The business world has a strong mythology around, and reverence for, the innovator – brilliant geniuses who upend the status quo and usher in a wave of change, making fortunes along the way. We often think that the first company to go down an innovative path is in an enviable position. But, in many cases, it is not the first mover who prospers, but the fast follower.

In an article for Business Insider, Steve Blank explains the history behind the first mover idea: “The phrase ‘first mover advantage’ was first popularized in a 1988 paper by a Stanford Business School professor, David Montgomery, and his co-author, Marvin Lieberman,” he writes. “This one phrase became the theoretical underpinning of the out-of-control spending of startups during the dot-com bubble. Over time the idea that winners in new markets are the ones who have been the first (not just early) entrants into their categories became unchallenged conventional wisdom in Silicon Valley. The only problem is that it’s simply not true.”

Proponents of the fast follower model argue that companies that observe new innovation have the benefit of conserving their resources while the innovator struggles to figure out the new paradigm through trial and error, often making costly mistakes. The fast follower benefits by being able to observe the first follower, copy their successes and learn from their mistakes.

Writing for the London Business School, Julian Birkinshaw and Kathy Brewis use Samsung as an example of an enormously successful fast follower. “In 1983, when Motorola launched the Motorola 8000, Samsung was still proudly making black-and-white TVs,” they write. “Today, the Motorola brand name has all but vanished: only the ‘Moto”’ product name is left as a small reminder of what was once a pioneering company at the forefront of innovation. Samsung, on the other hand, has become a dominant force in consumer electronics … Every time Apple launches a new product, Samsung brings out its own version a year or so later: think of the touchscreen phone, the tablet, the smart watch.”

It’s understandable to admire innovators, but there’s an argument to be made that our admiration should be limited to the innovation as opposed to the business model. So don’t worry if you haven’t come up with the next best thing. Just keep your eyes peeled for someone who has.

 

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