Haste makes waste, but waste is often the most important ingredient in a successful Internet launch.
If you want to be successful in business . . . in branding . . . in life . . . you have to get into the mind first. Notice we said “mind,” not “marketplace.”
Being first in the marketplace doesn’t buy you anything except a license to try to get in the mind first. If you throw away that opportunity by being too concerned with getting all the details right, you’ll never get it back. (Perfection in infinite time is worth nothing.)
What many managers are calling “the first-mover advantage” is a myth. There is no automatic advantage to being the first mover in a category unless you can make effective use of the extra time to work your way into the prospect’s mind.
A strategy that many large companies use effectively is to quickly jump on an idea developed by a smaller company. With its greater resources, the larger company can often win “the battle of the mind” and create the perception that it was first in the marketplace.
If you are the CEO of a smaller company, beware. You need to move exceptionally fast. Be quick or be dead. Marketplace Darwinism is survival of the fastest.
First in the mind doesn’t mean “early” in the mind either. Too many companies are satisfied with being “one of the first” brands in the category. That’s not the same as getting into the mind first and creating the perception that you are the leader.
Five companies, five brands, five Internet “firsts.” And five market leaders whose brands dominate their categories.
Were Yahoo!, eBay, Amazon.com, Bluemountain.com, and Priceline.com literally first in their categories? Amazon.com was not, and we’re not sure about the other four.
What you can be sure about is that the ideas for these sites occurred to many other people at about the same time. History shows that ideas tend to arrive in a variety of minds at approximately the same time.
The automobile was “invented” in Germany at about the same time as entrepreneurs in France, England, Italy, and America were working on many of the same self-propelled concepts.
The airplane was “invented” in America, but many French people thought the airplane was invented in France until they read about the Wright brothers accomplishing the same feat several years earlier.
Would we still think the world is flat if it weren’t for Christopher Columbus? Of course not. Somebody else would have discovered America and realized the world was round.
Would we still be communicating with smoke signals if it weren’t for Alexander Graham Bell? Of course not. Somebody else would have invented the telephone.
Would we still be using Thermofax copiers if it weren’t for Chester Carlson? Of course not. Somebody else would have invented xerography.
There’s a big difference between having an idle thought on a Sunday afternoon and having a successful brand on the Internet on Monday morning. Ideas (and those idle thoughts that initiate them) are a dime a dozen. It takes hard work and, even more important, a sense of urgency to put an idea to work on the Net.
You can’t dawdle. By this we mean endless testing, focus groups, market surveys. This is a particular problem for an Internet brand.
Why were most of the successful Internet sites launched by small, venture-capital-backed companies rather than Fortune 500 firms? A big company hates to do anything without first amassing a mound of market research.
The Internet is moving too fast to be measured. It’s a new industry. Knowledge is scarce. Few people know what they want, what they would use, what they would be willing to pay for . . . until they are given a real-world choice.
Big companies often fail to exploit new opportunities because they are “perfectionists.” They won’t release a new product, a new service, or an Internet site “until we get it right.”
Getting it right makes no sense from a branding point of view. Anything worth doing is worth doing in a half-assed way. Anything not worth doing is not worth doing in a perfect way.
Take Yahoo!, the most valuable brand on the Internet. Yahoo! is basically a search engine. It will find whatever you want to find on the Internet.
Yahoo! is the top search engine in almost every major country in the world. It generates 40 percent of all search referrals worldwide.
Did Yahoo! develop its own search-engine technology? No. In order to move rapidly, it outsourced its search-engine technology, first from Open Source, then from AltaVista, before finally settling on Inktomi.
The leading search engine didn’t develop its own search-engine technology? Does that surprise you? It shouldn’t. You don’t win by being better. You win by being first. Yahoo! succeeded because they “rushed the net.”
One of the abiding myths of American business is that you win by being better. Management commits billions of dollars in their search for better products or services to market. They “benchmark” their existing products and services against their major competitors. No new product or service gets launched unless it has a significant, tangible advantage.
Result: Nine out of ten new products fail. Why? Not, in our opinion, because of a quality deficiency. It’s because of a timing deficiency. They didn’t get that new product or service out in the marketplace fast enough.
Big companies often lack a sense of urgency when it comes to introducing new products or new ideas. Sometimes you can detect that in their public statements. “Maybe we are relatively late,” said Rupert Murdoch, CEO of News Corp., when he recently announced the company’s first Internet investment, “but only by a year or two.”
Only by a year or two? In less than two years, Priceline.com went from nothing to market leadership of a new category on the Internet.
Carpe diem. Where would Microsoft be today if Bill Gates hadn’t dropped out of Harvard in his freshman year to go to Albuquerque, New Mexico, to develop an operating system for the world’s first personal computer?
Carpe diem. Where would Dell Computer be today if Michael Dell hadn’t dropped out of the University of Texas in his sophomore year to start a company selling computers directly to businesses.
Carpe diem. Today is the best day of your life to launch an Internet company based on a new idea or concept. One that nobody else is using.
Have you ever heard of NorthernLight.com? You’re not alone. More than 99 percent of Web users are not familiar with the site.
Northern Light Technology LLC was the largest search engine on the Internet, in the sense that it indexed some 330 million Web pages. That’s far more than Yahoo!, Excite, Lycos, or Infoseek. Plus Northern Light compiled the contents of some six thousand full-text sources such as business magazines, trade journals, medical publications, investment databases, and news wires.
The problem wasn’t the site. The problem was the timing. Northern Light didn’t get turned on until three years after the Yahoo! launch. That’s much too late. Not only was Yahoo! gathering momentum, but the new search site also had to compete with AltaVista, Excite, Infoseek, and Lycos.
The problem wasn’t the money. Northern Light was financed with $50 million in venture capital, far more than Yahoo! had to work with.
It’s bad enough to start in second place. It’s worse to start at the back of the pack. In many situations it’s almost hopeless.
So what do you do if you’re late? Too many managers put on their Avis hats and say “We have to try harder.” Not good enough. (Remember the Law of Singularity.)
Paradoxically, it’s never too late. But you can’t launch in the year 2003 a great idea, circa 1995. If you get into the game late, you have to narrow your focus. Michael Dell was late, very late, into personal computers. So he decided to focus on selling personal computers by telephone. A good strategy. Today Dell Computer is the world’s largest manufacturer of personal computers.
Michael Dell didn’t make the same mistake when the Internet arrived. His company was the first to sell personal computers on the Web. Also a good strategy.
Nor is it ever enough just to move rapidly without a basically good idea. Time Warner was one of the first companies to set up an Internet site. Hence the name, Pathfinder.
But what’s a Pathfinder? At first the site was nothing more than a collection of information pulled from various Time Warner magazines: Time, People, Fortune, Money, Entertainment Weekly, and others. After the purchase of Turner Broadcasting System, the company added CNN, CNNsi and CNNfn to the site. They even managed to sell American Express on listing Travel & Leisure magazine on the site as well as Asia Week, a Hong Kong publication, now deceased.
After investing a reported $75 million in the site, Time Warner recently shut it down. What’s a Pathfinder? The only meaning the name had was that it was a site for Time Warner publications. But few people care who publishes a magazine (unless John F. Kennedy Jr. is involved, and as soon as he was gone, George magazine was gone, too). They only care about the magazine itself.
Nobody reads Fortune because Time Warner publishes it. They read Fortune in spite of the fact that Time Warner publishes it. The name of the company that publishes the magazine is irrelevant to the average reader. Fortune is the brand, not Time Warner.
After Time Warner gave up on Pathfinder, the company retreated to individual sites for each of its major publications. Also not a good strategy. (Line-extension sites of magazine brands might be good for selling a few subscriptions, but they are not the way to build a powerful presence on the Web.)
Time Warner bills itself as the “world’s foremost media company.” How could two yahoos from Stanford beat the world’s foremost media company?
Easy. All you need to do is to get your strategy right and your timing right. Both are required. One without the other won’t work.
P.S.: You probably noticed that it was AOL that took over Time Warner and not vice versa.