Second-Mover Opportunities: Bringing a Gun To a Knife Fight

picture of an old knife
Thanks Harry Nieboer for catching this one in your post, Spending time on features that are never used.

IBM developerworks has an introductory article by Laura Rose in their Rational section titled Involving customers early and often in a software development project.
Laura’s main point

The main point of Laura’s article is the importance of engaging users to find out what they really care about. In this post we are going to pick up on another point she makes indirectly.

usage breakdown

[image from IBM developerworks]

What isn’t as obvious is that, of those 100 features, a total of 64 percent are rarely or never used by any customer. But to stay seemingly competitive to the other brands, we incorporate superficial solutions to the unneeded 64 features, allowing us to “checkmark” those rows (making our product more complicated and frequently more difficult to use).

Laura’s accidental point
Laura also points out indirectly that the inclination of companies is all too often to build software that looks good on paper instead of software that is good in practice. A sort of rat-race of me-too’s and mimicry. Companies that add features solely because the competition has them are in for trouble.

In our previous post on applying Kano analysis to requirement prioritization we talk about how innovation, and more-specifically differentiated innovation is key to the success of software. If we base our requirements on keeping up with the competitors, we aren’t setting the stage for innovation, we’re setting the stage to be second-movers.

The second-mover advantage myth

It may not be bad to be a second mover. Atari moved first, Sony, Nintendo, and Microsoft now dominate the market for video games. But being a second mover doesn’t provide an advantage – it presents an opportunity. Activision, Coleco and Intellivision were all second movers too, and they vanished into obscurity.

Sorting out the second movers

In one camp we have the failed companies, Activision, Coleco, and Intellivision (ACI, collectively). In the other camp, we have the thriving (or at least surviving) companies, Sony, Nintendo, and Microsoft (SNM).

The ACI companies did not differentiate their products. Team ACI had two major problems. They turned out a bunch of really poor products that would fail in a static market, and they failed to respond to changes in their market. Not only did they not innovate or differentiate, they failed to live up to the existing standards. They also failed to respond to the changes in the marketplace caused by low-cost personal computers. The pc technology was disruptive, and the marketing was ruthless (“your college bound kids need a computer more than a game console”) and effective. The new pcs could provide the same gaming experience at a comparable price and they had value in being used as computers. The ACI companies showed up for a gunfight with knives.

The SNM groups innovated and differentiated themselves. The SNM group had the opportunity to see how the market was changed by pc companies. They also had the opportunity to see that customers actually cared about the quality of the products. The SNM companies realized that as long as pcs could provide a comparable gaming experience, they would dominate the market because their products were differentiated with computing capabilities – so SNM created solutions that could not be implemented with pcs of the day. The SNM group also saw that their products would need to be good to be sold. Their strategy was effective. The SNM companies disrupted things by showing up to a knife fight with guns.
Being a second mover didn’t provide an advantage, it provided an opportunity. ACI failed to capitalize on that opportunity, where SNM created an advantage from the opportunity they were presented.
How to act as a second mover

  1. Show up to the knife fight with a gun. Redefine the rules of the game. Look at the feature-lists of your competitors and guess at the underlying requirements. Find alternate problems to address, or address the same problems in innovative ways. Make those features irrelevant. When I use Gmail, I don’t care if I can copy all my emails from one folder to another – they don’t even have the concept of folders.
  2. Elicit the right requirements. See Top five requirements gathering tips for more.
  3. Ideate to determine which problems to address and which to make irrelevant. See From MRD to PRD […] for more.
  4. Prioritize requirements ruthlessly. See Prioritizing software requirements […] for more.
  5. Implement with high quality.

5 thoughts on “Second-Mover Opportunities: Bringing a Gun To a Knife Fight

  1. The first mover advantage is overstated. They may not create the category.

    It turns out that the market will select the best marketer over a technically superior product. If the product is not embodied in either marketing or technology excellence, it will fall to the third or lower position in the market.

    The best marketer creates the category regardless of the number of vendors in the pre-category market. The vendor that consumes the majority of the market the fastest wins.

    History shows up that a technology shows up and fails many times before finding a successful business embodiment.

  2. Pingback: Scott Sehlhorst

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