I am a huge fan of the writings and research of Steve Blank.  But I think that his most recent post on first movers vs. fast followers can be easily misinterpreted. 

His uber-point is that fast followers actually win more often than first movers.  He also makes the point that being a first-mover is rarely an inherent advantage, in fact, it can be a disadvantage as others can quickly learn from the path that you have paved. 

All fair points.  But I fear readers might go on to think that the right way to start a company is to watch some target markets, look at what’s working, and then quickly try to follow.  It’s a very academic or consultant-style approach that I think rarely really works. I know this isn’t that Steve is proposing, but I think a lot of people might read his piece and go off and try to do this. 

I know there are counter-examples.  Especially when it’s a cross-border export of a successful model (ie: Gilt Group <— Vente Privee).  But by and large, I don’t personally get as excited about these kinds of entrepreneurial stories. A few reasons:

1. Fast followers are leaders in disguise. I’ve blogged about this multiple times. Being able to really understand what’s working in a market and quickly respond requires that you are actually deeply embedded in the markets that you are competing.  You need to have a sixth sense of customers, partners, competitors, and others.  It’s something that can’t be done from the outside looking in.  I think many fast followers were actually pursuing something related, and then pivoted to be a follower.  But the reason they were able to do it so quickly was because they were really leaders. 

2. Authentic Entrepreneurs.  This is one of the ideas that I have absorbed from my partner David, and I think it’s a great one. I love entrepreneurs that are pursuing a problem that is authentic to them.  Either something that they experienced in a previous job, an itch they want to scratch as a user, of a vision for the future that they completely believe in. Often, their authenticity allows them to get to first base more quickly, through their personal networks or knowledge of the space.  They also will likely be more equipped to make small pivots to an ideal model, because they understand the nuances of their space. I think you find authentic entrepreneurs both as first-movers and fast followers. 

3. Network Effects. I think some of the discussion around first-movers vs. fast followers are due to a mis-understanding of network effects.  When the value of a product or service is enhanced when others are using it, that creates real competitive advantage (vs just the bravado of being “first”).  Often, fast followers can jump on before the first mover has established meaningful network effects.  Other times, fast followers have an unfair advantage that allows them to build their own network effect quickly.  But this is a very real advantage, and is a reason why marketplace business models, social networks, and similar services are so difficult to dislodge once they build momentum. 

4. First vs. Best vs. Re-invention. As some folks commented on Steve’s post, most companies are some derivative of something that already existed.  But many “fast followers” aren’t really copy-cats as much as they are evolutionary products.  Was Facebook really a fast follower of Friendster in the academic sense?  I don’t think so.  Was Google really a fast follower of Overture?  I doubt that the founders of Google said to themselves “wow, what Overture is doing is really working – I’m going to copy them and do it better”.  What you do see is that spaces do re-invent themselves rapidly.  And the pace of this innovation is happening faster and faster.  Incumbents can’t be happy just being first and having an early lead.  They have to build an internal culture of innovation that ensures that they remain best for as long as possible.