Being a close second can be $$$ profitable

As a trivia junkie growing up, one of my favorite question was who the second man on the moon was?  Not many people knew the answer. The moral was “No one remembers who come second”. This feeling was also amplified by Nike in its famous ad which went on to say “You Don’t Win Silver — You Lose Gold”.

When you grow up with such sentiments you are bound to bring the same in your business environment.  First mover does have its advantages but in a technology driven world where consumer preferences can be fickle and brand loyalty is a premium, being second sometimes can be more profitable and less expensive especially for startups.

Remember you are in business to be profitable not to make a mark in the history books.


1. Learning from other’s mistakes:

You can avoid costly mistakes by just observing what your competition is doing and most importantly not doing. This helps you in preparing your entry strategy and your unique positioning in the minds of your consumer.

2. Less R&D spending:

                R&D expenses are a skunk cost and any advantage you can get by learning from your competitor is a money saver for the firm. It also helps that your competitor would have spent its own resources in building and educating suppliers.

3. Marketing expense in educating the consumers / Building category need

                The biggest advantage is you have to spend less on educating the customers of your category and can focus solely on your product advantage vs. your competitors.

But in order to take advantage of being a close second you need to follow the leader closely and enter the market before the category reaches a tipping point and becomes a red ocean.


Answer to the above trivia question:  Edwin “Buzz” Aldrin

Two famous firms which weren’t the first mover in their category:

1) Google Search Engine; Remember Alta Vista

2) Facebook; You are alone out there in MySpace


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