A fast follower is an organization that waits for a competitor to successfully innovate before imitating it with a similar product.
- Understanding fast followers
- Fast follower examples
- Key takeaways:
- The FourWeekMBA Business Strategy Toolbox
Understanding fast followers
Most people are familiar with the term “first mover advantage”, but might there also be an advantage to moving second?
Fast followers, who entered the market no more than 13 years after the first movers, were successful in 92% of examples.
Fast followers are organizations that wait for competitors to release pioneering innovations before releasing products of their own.
This is a strategy that is particularly effective in industries where standards and technology are dynamic and evolve frequently.
A failure to imitate with speed increases the likelihood of the pioneering company building an advantage or moat of some kind.
“The pioneers have all the costs for R&D, the failures and the time involved. The fast follower can just cherrypick the best technology that emerges.”
Fast followers can also learn from the mistakes of another company and release a product that better satisfies consumer needs.
Fast follower examples
Let’s take a look at a few examples to solidify the fast follower concept.
Google’s PPC search engine is the undisputed leader in its industry, and many assume that the company came up with the concept.
However, the pay-per-click advertising model was actually developed by Goto.com (Overture) in 2001.
Overture instead used its own PPC model to advertise on websites such as Yahoo and AOL, which meant that much of its advertising revenue was paid to partners.
Google was able to improve on this innovation by subsidizing non-commercial keywords with advertising associated with commercial search terms.
This enabled Google to supplement its paid ad revenue via supplementation and become the dominant force.
Apple has been a fast follower on several occasions. The iPod was not the first music player. The iMac was not the first personal computer.
The iPhone was certainly not the first smartphone.
In each case, the company waited until a rival identified a real consumer need, entered the market, and defined the product category.
It then observed the market to identify product weaknesses and set about developing a solution that addressed those weaknesses.
In most cases, Apple added useful ecosystem features to its products instead of superficial, low-value improvements.
BlackBerry and the iPhone
Let’s consider the Blackberry, a revolutionary product in its own right which was successful for a few short years.
While the Blackberry was a mainstay of the corporate world, Steve Jobs envisioned that the biggest smartphone market would be ordinary consumers and he designed the first iPhone accordingly.
The Blackberry featured a clunky plastic keyboard and a non-ergonomic design that could not be carried in one’s pocket comfortably.
Their popularity among corporate executives also made them uncool with younger consumers and the device was tied to a single network that was subject to security concerns.
When Jobs made an impassioned speech on January 9, 2007, he shared Apple’s vision for three new products: a widescreen iPod with a touch screen, a breakthrough in internet communication, and a revolutionary mobile phone.
He then stunned an enraptured crowd by exclaiming “Are you getting it yet? These are not three separate devices. This is one device. And we’re calling it the iPhone.”
Taking a less than subtle swipe at BlackBerry, Jobs later noted that:
“The most advanced phones are called ‘smartphones’… so they say. They combine a phone and some email capability… and all have these little plastic keyboards on them. The problem is that they’re not so smart and they’re not that easy to use.”
- A fast follower is an organization that waits for a competitor to successfully innovate before imitating it with a similar product.
- The fast follower strategy relies on a company releasing an imitation product in rapid time to secure vital market share before the competition. When successful, the fast follower can avoid the financial and reputational risks inherent to innovation.
- Examples of fast followers include Google, who improved Overture’s PPC advertising model, and Apple, who can attribute the success of many of their most famous products to the strategy.
The FourWeekMBA Business Strategy Toolbox
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