Posted on Nov 5, 2012

Astute Marketers and Fast Followers

Just like racing, most marketers understand the power and importance of being first.

In the popular book The 22 Immutable Laws of Marketing, this fact is highlighted in Law #1: The Law of Leadership. Authors Al Ries and Jack Trout state: “The leading brand in any category is almost always the first brand into the prospect’s mind.”

However, since 1993, when Ries and Trout first published this book, many marketers and business leaders have learned that being the leader carries risks. To stay in the lead, you need the proper resources, the right team, and a heck of a lot of determination. One wrong move and you can quickly become road kill.

Consider Pets.com (online pet supplies), GeoCities (web hosting service), Webvan (online credit & delivery grocery), Broadcast.com (Internet radio), and Borders (book and music retailer). While some were sold to bigger companies (e.g. Yahoo! bought GeoCities and Broadcast.com), they nevertheless failed to maintain a leadership position – or even stay in the race – and were ultimately shut down.

Learning from the failures of others, a new catch phrase has emerged amongst would-be market leaders: “We don’t mind being on the leading edge. But we don’t want to be on the bleeding edge.”

Today, many smart marketers have learned the value of Astuteness.

The Value of Astuteness

As a differentiating value, Astuteness means shrewdness; quick at seeing how to gain advantage; critically discerning.

The most prominent organizations that embrace this value are large, Fortune 500 companies. Just like a hawk circling in the sky, they shrewdly observe the market place – and the race – looking for start-ups and smaller companies leading in their categories. When they see an entrepreneur successfully leading the race, they swoop down and take control, adding their massive resources behind the leader (and changing out the logo on the race car to the ‘big’ brand).

A classic example is Microsoft. Over the past 25 years, they have scooped up over 145 companies, including Skype in 2011 and Yammer earlier this year.

Another is Google. Since 2001, Google has acquired over 100 companies, including YouTube, Android, and DoubleClick. This is a firm that clearly knows how to gain advantage.

Then there is the Walt Disney Company, acquiring Pixar in 2006, Marvel Entertainment in 2009, and now Lucasfilm, including its Star Wars and Indiana Jones properties.

But the value of astuteness is not confined to big companies. Smaller companies and entrepreneurs can also learn to be critically discerning, before taking the lead. They start as fast followers.

Fast Followers

Some companies do manage to capture dominant market share over the leader, despite entering the market late. While they may have followed the leader into the category, they quickly prove their astute abilities to gain competitive advantage.

In the 1980s, Nintendo showed their astuteness by usurping Atari as the leader.

In the 1990s, Palm Pilot took the dominant position over Apple’s Newton PDA. Of course, being a fast follower doesn’t ensure long-term success either, as Palm Pilot is now gone.

In 2008, Facebook surpassed MySpace, which had a serious head start but never managed to get much traction. The Facebook team was astute enough to build a profitable ad-based business model, growing it to become the world’s largest social media service.

So who are the fast followers today?

Just like in a NASCAR race, fast followers are in the #2 and #3 spot, right behind the category leader, looking for the opportunity to gain an advantage. They don’t have to be better then the leader. They just have to more astute.