The notion that being first at something is more valuable than being second or later is called the “first-mover advantage.” The advantage of being first might seem obvious. Why let somebody else beat you? It turns out that there are many times when it pays to wait.

Richard Harker

By Richard Harker

It’s called the “first-mover advantage.” The notion is that to be first at something is more valuable than being second or later. The advantage of being first might seem obvious. Why let somebody else beat you? It turns out that there are many times when it pays to wait.
If you lived in New York City at the turn of the 20^th century, would you have been better off owning a horse-drawn hack business or the automobile taxi service? Despite the fact that the automobile was starting to take off, it turns out that the first New York taxi service went bankrupt. Then the second taxi service went bankrupt too. It took three tries before motorized taxis became profitable.
Even a highly successful innovative company can misread a market. Apple’s Newton, the first PDA, was a failure. It was the second-mover, Palm Pilot, that dominated the category for years. In contrast to the first-to-market Newton, the iPod wasn’t the first MP3 player, and the iPhone wasn’t the first smart phone. Both the iPod and iPhone were huge successes because Apple improved on existing products.
The Internet bubble of the late 1990s took the first-mover concept to a whole new level. Fueled by a seemingly limitless source of investment dollars, developers launched dozens of half-baked Internet sites in the belief that to be first was better than to be the best.
The success of Amazon.com makes the case for a first-mover advantage. It was the first in its category, and despite a difficult first few years, survives to this day. However, for every Amazon there was a Pets.com, iVillage, eToys, and Webvan that didn’t make it. Being first in their category offered no advantage. It turned out that without the advantage of watching others try and fail, each of the companies wasted time and money, and ultimately disappeared.
Radio has historically found it easy to innovate, perhaps too easy. We can change format over a weekend. We can tweak a format sitting in front of a computer. New technologies have complicated our ability to rapidly innovate. Today we have HD, we have streaming, we have a web site, and now smart phone applications, all in addition to the traditional formatic issues we face every day.
New media innovations now entail longer time frames and bigger budgets–at a time when staff is spread thin and budgets are cut to the bone. So more than ever, we need to know when to be the first mover, and when to let someone else blaze the trail.
A successful format launch often results in many stations copying the originator. The 80s format, Smooth Jazz, MOViN, and now perhaps CHR were formats that stations pounced on before it was clear that the format had legs. There’s always the risk that some other local station will jump on the format if you don’t, but there’s also the risk that if you jump too quickly you may be stuck in a format without a future.
Don’t jump into a format just because other stations are having some initial success with it. Early gains are often given back after a few months. Every market has a different mix of competitors and a different market dynamic. What is working in another market may not work in your market.
Take time to research the format. Is there sufficient interest in the format? What stations will you compete with? Despite radio’s tradition of leaping first and looking afterwards, it is better to let another station jump into an untested format than to try to preempt the move by switching first. If research confirms the opportunity, don’t be afraid to launch a challenge to the first mover. Find their weaknesses and offer a better targeted version tailored to the market.
Within every format there are industry driven fads and listener driven trends. Innovation should capitalize on real trends, but avoid fads. Every format evolves and morphs over time. A station in a leadership position should constantly innovate in substantive areas without trying to get ahead of every competitive move. Admittedly, a challenger needs to take a more aggressive approach, surfing trends in an effort to out-maneuver the leader. Even a challenger, though, should resist the temptation to try to be the first in everything.
With radio under attack from new media, the battle has shifted somewhat. Years ago we simply worried about our radio competitors. In today’s environment, much of the innovation is technological innovation. New media innovations are particularly challenging because technology is expensive, and adding new technologies can consume a great deal of both time and money. Every time a minute or a dollar is committed, there are less of both to be deployed elsewhere.
We all know the Internet is going to be important in the future, just like automobiles for public transport, but we can’t know precisely where and when the money and time should be spent. How much attention should you devote to HD channels? Should you create original programming or something simpler? How important is streaming? And if you stream, should you create multiple streaming products? How much effort should go into the web site or social networking?
New-media pundits will tell you that you need to pursue all initiatives in all areas. Easy to say, much harder to do. Rather than dabble in all these areas, it is better to monitor developments until it is clear which innovations will have the best payoffs. Then devote all your energies in those one or two areas. Remember, first-movers don’t always win. It is better to do an outstanding job in a couple of areas than to do a poor job in multiple areas.
While it often pays to wait, the decisions you make as a second-mover are just as important as if you acted earlier. The key is to improve on the pioneer’s product. Critically look at what others are doing. What mistakes are being made? Where are the flaws? How can it be improved? If you are not first, you need to be better, and the difference needs to be sustainable.
How do you decide whether to be a first or second mover? Sometimes it boils down to money. If you don’t have the budget, it is better to wait. There are efficiencies that come from waiting. Let someone else make mistakes–and pay for them. This is particularly true if the innovation is entirely new for you. Again, it is better to let somebody else work out the kinks.
When should you be the first-mover? Act first, if failure to act seriously jeopardizes your position. The key word there is seriously. Not all competitive actions need to be preempted. In fact, many stations tend to constantly anticipate and innovate. Trying to do too much dissipates energies and budgets, so act first sparingly.

Richard Harker is President of Harker Research, a company providing a wide range of research services to radio stations in North America and Europe. Twenty-years of research experience combined with Richard’s 15 years as a programmer and general manager helps Harker Research provide practical actionable solutions to ratings problems. Visit www.harkerresearch or contact Richard at (919) 954-8300.