It is often drilled into our heads that it is important for a business to reduce its Time To Market (TTM) or the time to take a product from conception to the market for sales. True, but we are also told that contrary to the popular notion, TTM is more important for market followers than first movers. This is where there is something grossly counter-intuitive for me in the aforementioned theory. According to me, TTM is very important for the first-in-the-market players but not so much for the later entrants.
Any entrepreneur who is building a new product which is the first of its kind is inherently taking a lot of risk. The risk not only exists in terms of investment of money, time, and effort, but also gets amplified owing to any reasonable proof of concept in the market. One can never be really sure about how customers in the market are going to receive one's first-of-a-kind product because, well, the customers haven't seen anything like it before. The more one tries to "perfect" the product, the more investment is required, and therefore the more risk one faces.
Now imagine that while one was still in the process of building the said product, a competitor introduces a similar product in the market. There could be the following scenarios:
As you can see, in 3 out of 4 scenarios, the risk for the second entrant is lower than what it was before the competitor released the product. The risk is lowered because the late entrants have the luxury of "proof of concept" that the market leader did not have. Therefore, the TTM becomes less important for them than if they were still in the fray to be the first one to introduce the product.
The risk however does increase significantly if the competitor's product is superior to one's own current product and has already been accepted by the market. It becomes imperative then to invest more into the product to make it AT LEAST AS GOOD AS THE COMPETITOR'S before taking it to the market AS SOON AS POSSIBLE.
The TTM in this case becomes extremely important. It however does not overshadow the need to make the product better. Taking a substandard product to the market when customers already have the option of a better one, will be suicidal for any business.
On a concluding note, I would like to highlight the 'GOOD' in the "at least as good as the competitor's" statement above. Invariably, the notion of good is associated with the concept of "value for money". The operative word being value. The notion of value is intrinsically linked to target customer segment, price, promotion, and channels (the 4Ps, if you will).
For a business owner, it becomes important to immediately assess the value that the competitor's product is trying to provide and therefore re-calibrate the value that one may choose to provide instead. Several businessmen caught in the top right corner of the box above end up immediately releasing their offerings at a different price, or to a different customer segment, or through different channels. Soon enough, they end up creating a different positioning in the minds of customers and are rarely bracketed in the same category as their competitors.
Some interesting examples of market followers who arrived late and yet overshadowed the market leaders:
1. Microsoft Windows vs MacOS
2. Facebook vs Orkut
3. Google vs Altavista
4. Google Chrome vs Internet Explorer
5. Toyota vs Ford
Any entrepreneur who is building a new product which is the first of its kind is inherently taking a lot of risk. The risk not only exists in terms of investment of money, time, and effort, but also gets amplified owing to any reasonable proof of concept in the market. One can never be really sure about how customers in the market are going to receive one's first-of-a-kind product because, well, the customers haven't seen anything like it before. The more one tries to "perfect" the product, the more investment is required, and therefore the more risk one faces.
Now imagine that while one was still in the process of building the said product, a competitor introduces a similar product in the market. There could be the following scenarios:
| Inferior Competitor Product | Superior Competitor Product | |
| Market Accepts | No risk; immediate product release | Very high risk - make product better and release immediately |
| Market Rejects | Lower risk - Make product better and release after some time | Risk avoided - can divert investment to some other product |
As you can see, in 3 out of 4 scenarios, the risk for the second entrant is lower than what it was before the competitor released the product. The risk is lowered because the late entrants have the luxury of "proof of concept" that the market leader did not have. Therefore, the TTM becomes less important for them than if they were still in the fray to be the first one to introduce the product.
The risk however does increase significantly if the competitor's product is superior to one's own current product and has already been accepted by the market. It becomes imperative then to invest more into the product to make it AT LEAST AS GOOD AS THE COMPETITOR'S before taking it to the market AS SOON AS POSSIBLE.
The TTM in this case becomes extremely important. It however does not overshadow the need to make the product better. Taking a substandard product to the market when customers already have the option of a better one, will be suicidal for any business.
On a concluding note, I would like to highlight the 'GOOD' in the "at least as good as the competitor's" statement above. Invariably, the notion of good is associated with the concept of "value for money". The operative word being value. The notion of value is intrinsically linked to target customer segment, price, promotion, and channels (the 4Ps, if you will).
For a business owner, it becomes important to immediately assess the value that the competitor's product is trying to provide and therefore re-calibrate the value that one may choose to provide instead. Several businessmen caught in the top right corner of the box above end up immediately releasing their offerings at a different price, or to a different customer segment, or through different channels. Soon enough, they end up creating a different positioning in the minds of customers and are rarely bracketed in the same category as their competitors.
Some interesting examples of market followers who arrived late and yet overshadowed the market leaders:
1. Microsoft Windows vs MacOS
2. Facebook vs Orkut
3. Google vs Altavista
4. Google Chrome vs Internet Explorer
5. Toyota vs Ford
