The second-to-market strategy

In my time here at CU*Answers, I’ve been party to conversations revolving around how, why, and when the organization invests in software. We may develop around the clock, but prioritizing the what and when can be a delicate balancing act that isn’t always seen.

What we develop next is a frequent topic of debate, and often clients would like to see the CUSO get to work on that newest piece of technology they saw at a recent tradeshow or online. The one that’s going to change everything and leave those unwilling to dive in behind. They want to be the first in their region to get that feature and ride it to victory.

Sarcasm aside, I completely understand the appeal. We do it in our personal lives all the time. Apple or Google (I prefer Google) release a new gadget and we fork over big money to have it first. And while there’s appeal in that, we can often find ourselves disappointed because first to market devices have a growing curve.

We’ve created such a mythology of being first–first to the moon, first in the Olympics, etc. But second to market strategies, especially in product development, are a tactical skill that can and has often been used by many successful businesses to get ahead.

Did you know that the iPad wasn’t the first tablet? Before the iPad’s introduction in 2010, Microsoft had designed and released a tablet in 2000. Two years later they introduced their first color screen tablet (the Windows XP Tablet). But neither took off, and when Jobs released the first iPad eight years later, people thought it was revolutionary. But was it?

There are no doubts that first-movers can have major advantages, especially if the launch goes well, but companies that follow have their own advantages. They can study the early-movers, see what works, what doesn’t, and release their own version with less risk of an unprepared market.

Second-to-market strategists are precisely that: strategists. It’s a business tactic that reduces costs and mistakes as a path forward has already been paved. It just has to be done well. Learn from mistakes or design flaws from early entrants. Improve on the designs or increase ease of use. With early entrants having already done the marketing work of introducing a new product or feature, marketing can instead be focused on identifying the differences that make your product better.

The draw to be first is strong. Pioneering a new product or initiative is a worthy endeavor, but one often fraught with risk. Any business should consider whether being the first is really worth that risk, or if being an expert at second-to-market strategies is the better way forward.

3 Replies to “The second-to-market strategy”

  1. Second to market strategies do provide less risk. But for too long, credit unions wait to be third, fourth or never-to market, causing missed opportunities for growth.

  2. Sometimes those who who are first in a race celebrate before they actually cross the finish line. This causes them to lose. A distinct advantage of second as a strategy is being able to see what’s ahead, reshape ideals and dominate new markets.

  3. There is a painfully fine line between cutting edge and bleeding edge and often credit union practioners struggle with even being second to market. Risk reward calculus in credit union management is inherently conservative which tends our industry as a whole to be a ‘second to market’ group. Does that indicate this is a failing strategy…it depends on which sector of the market one chooses to lag. As a smaller credit union we struggle with the resources to allow us to be in a first to market position not because we don’t have the appetite for those risks but instead struggle with net worth safety nets while trying to find those income drivers. In thinking about the CUSO as a second to market player, I would think the cooperative as a whole determines some of those strategies with the board they elect and the boards directives around execution by the management team. As a a piece of the puzzle our organization is pleased to be able to leverage off of CUA’s second to market strategy as in many cases we couldn’t potentially afford to third to market on our own merits.

Comments are closed.