Pioneers Get Shot

“When I was a kid I never learned to play. I actually got in bands through watching people play and copying them.” – Charlie Watts, Rolling Stones

If you watch any of the old western movies, there is a common theme in all of them that’s just as true today. Pioneers often get arrows in the back. Among Silicon Valley high-tech firms there is a variation of this that says there is a dangerous bleeding edge beyond the cutting edge of innovation.

Yes, pioneers have the greatest opportunities to stake a claim or find the mother lode, but they also take the greatest risks. Once they have found gold, oil, or water it’s all too easy for someone to set up shop right next to them and tap into the same source from an adjoining field with none of the risk or cost associated with the pioneers’ venture.

Being in any market early is risky and costs twice as much as it will cost the next guy to enter the same market. Far better to be the settler who comes along and enjoys the fruits of the valley after the pioneer has rid it of dangers.

I was not the first person to put together a monthly package for martial arts school owners, but I was the first guy to get it right and charge a premium fee. Later several other people came into the business, all with shameless copies of my product and all at a lower price. I am sure they made every bit as much money as I did and without any of the development costs.

I created the market; they exploited it.

The same thing happened to me in the golf business. There were a couple of companies doing websites but I was the first to jump on it and create an easy-to-use premium product. Once my approach was proven successful, a whole bunch of people copied my product exactly. They had prices you can afford to charge when you copy, not innovate. While their products were inferior to mine, the majority of the business is unsophisticated enough not to care.

Lots of other companies have failed with the best product early. Sony beta was a better product than VHS, but failed because the other manufacturers had better marketing. Apple’s original product was a better product than a PC but had to be bailed out years later by none other than Bill Gates before it succeeded. Lots of people delivered pizza before Domino’s perfected that as their marketing strategy. A great many hit shows like American Idol were not original, but copied from hit formats in other countries.

Contrary to popular belief, most great products or companies are not great because of an original key idea but because someone has taken a good idea and made it cheaper or marketed it better.

Leveraging off an existing business, product, or idea is far less risky than being a pioneer.

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