Being first to market not always the wisest course

When driving in what is called rush hour traffic on Interstate 25, sitting in stop-and-go traffic with enough time during stops to check my emails and respond to text messages (but not enough time to write this column), I am reminded of the two-second rule of driving, “Always adjust the position of your car so that it is at least two seconds travel time behind the car ahead of you.”

[If you have not heard of this rule, it is a simple and safer way to determine how close to follow a car.  Watch the car ahead of you pass an object along the road and count slowly to two – one thousand one, one thousand two.  If you are following a safe distance you will pass the same object when or after you complete this count.  If everyone followed this rule, there would be fewer accidents and less stop and go traffic, so I am offering this safety tip in my own self-interest.]

As I work in multiple projects that are leaders from a thought, technical or marketing perspective, I am reminded of an old adage, “When on the bleeding edge of innovation, it is better to be just behind the edge, than in front of it.”  In certain markets, it seems like there is only room for one person and the ‘first to market’ will be the winner.  However, too often, the first-to-market advantage is so costly that all competitors reach the market at a fraction of the investment.

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While driving (sitting still in traffic) I was thinking about what is the appropriate distance to follow a business leader when setting the strategy for one of my businesses.  Should I run side by side, trail the leader or pass them by?  What is a safe distance to follow?  What would be the equivalent of a ‘two-second rule’ in a business marketplace?

In watching the Olympics, I watched leaders in the bicycling marathons get beat at the end of the race by competitors who collaborated with each other.  Each competitor took turns leading with the others drafting behind — using less energy.  This enabled each of the competitors to have some energy in reserve to pass by the leader for the ultimate prize.   This speaks highly to the advantages of collaboration — even amongst competitors.  It also represents a precise understanding of one’s own resources and capabilities.

There are times where being the leader will gain press and attention.  This is very attractive.  To be first and get the free press that commonly follows leaders seems like an opportunity not to be refused.  However, one has to be careful that this does not become simply an ego booster without much of anything else. 

My experience has been that every opportunity and every market is different.  Each project or business faces a different combination of challenges which may recommend toward or away from a leadership position. 

Like driving down the highway, in business I find it is good to pick out objects or milestones along the way.  When I get to each milestone, I need to measure my progress and pick another milestone.  This allows me to adjust my speed and possibly make a lane change to assure that I get to my destination — not simply gain the reward of being first.

All of which reminds me of instructions I once received on rock climbing.  Each “hold’” represented a shifting of my weight from one stable point to another.  This action has to be completed carefully and precisely so that I would not find myself dangling from my safety rope.  I see entrepreneurs needing to progress in this same fashion — a series of defined steps leading to a goal.  The difference between a good leader and a risk-averse follower may be no more than how fast one goes from point to point — safely.  I see leading entrepreneurs running from point to point — quickly identifying the opportunities and addressing the challenges along the way.

Contact Karl Dakin of Dakin Capital Services LLC at 720-296-0372 or kdakin@dakincapital.com.