All this talk recently about Groupon clones got me thinking about fast followers.
In competitive markets, fast followers pile on very very quickly. Every one of them says to themselves “the market is wide open, we can be the number 2”. There are 2 problems with this.
1. Most fast followers are not fast enough. By the time they notice that a leader is taking off, do the market research to validate the opportunity, and start to execute, it’s too late.
2. Most fast followers think features will help them differentiate. This will be a subject of another post. But features won’t separate you from a bazillion other followers. It’s also a mistake to think that the leader will stand still.
But the bigger point is this. Most fast followers are actually leaders in disguise. They are usually the same entrepreneurs who have a knack for anticipating where markets are going and executing with crazy speed and passion. What these folks find though is that they aren’t always right, so they have to pivot quickly. That’s usually how fast followers are born. They are usually entrepreneurs who already knew there was an opportunity in a sector, and were pursuing something that wasn’t quite right until they saw a leader emerge. Then they iterated and became #2. For examples, consider Living Social vs. Groupon or Booyah vs. FourSquare or RueLaLa vs. Gilt vs. vente-privee. Both knew about the success of the leaders earlier because they were already operating in and around the space. And both pivoted quickly and had the means to quickly create some separation from all the other followers.