Apr 24, 2008

When to be a first mover? When to be a fast follower?

Day 2 at the Digital Money Forum in London.

In his intro today, Dave Birch made a comment that I found interesting. Many of us know that Western Union passed up on the telephone patent in 1871, saying that there was no money to be made in the technology. Of course, it eventually became huge, but only much later, in 1929. So all those guys in charge of Western Union in 1871 were absolutely right not to put any money into telephones in 1871. The technology finally took off long after those men were long gone and retired.

This is in line with a popular quote a few years ago that's been overused (why am I using it again?), "You can recognize a pioneer easily; he's the one with all the arrows in his back."

Innovation, first mover advantage, fast follower, etc. -Sigh- When do you decide to move aggressively, and when do you decide to wait? From what I have experienced, you don't usually have a choice. You are forced to move forward aggressively, even foolishly (as viewed by others) into new technology and business models when you are backed into a corner and can't get into the market through mainstream channels. Once you're in though, you are almost forced to switch tactics and adopt Western Union's mindset.

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