The curse of the second mover

The curse of the second mover

When I lived in Alaska, there was an obnoxious shirt that I used to see all the time, with a group of sled dogs pictured on it. The cutesy saying on it was, “If you’re not the lead dog, the view never changes.” While driving home last night and considering multiple tech marketplaces today, it came to mind.

Consider the following. If you were:

  1. Building an application for phones and tablets today, whose OS would you build it for first?
  2. Building a peripheral device for smartphones, what device platform would you build it for?
  3. Selling music today, whose digital music store would you make sure it was in first?
  4. Selling a movie today, whose digital video store would you make sure it was in first?
  5. Publishing a book, whose digital book store would you make sure it was in first?

Unless you’ve got a lot of time or money on your hands, and feel like dealing with the bureaucracy of multiple stores, the answer to all of the above is going to be exactly the same.

Except that last one.

If you’re building apps, smartphone peripherals, or selling music or movies, you’re probably building for Apple first. If you’re publishing or self-publishing a book, you’re probably going to Amazon first. One could argue that you might go to Amazon with music or a movie – but I’m not sure that’s true – at least if you wanted to actually sell full-fare copies vs. getting them placed on Prime Music/Prime Instant Video.

In the list above, that doesn’t tell a great tale for second movers. If you’re building a marketplace, you’ve got to offer some form of exceptional value over Apple (or Amazon for 5) in order to dethrone them. You’ve also got to offer something to consumers to get them to use your technology, and content purveyors/device manufacturers to get them to invest in your platform(s).

For the first three, Apple won those markets through pure first mover advantage.

The early arrival of the iPhone and iOS, and the premium buyers who purchase them, ensure that 1 & 2 will be answered “Apple”. The early arrival of the iPod, iTunes, and “Steve’s compromise”, allowing iTunes on Windows – as horrible as the software was/is – ensures that iTunes Music is still the answer to 3.

Video is a squishy one – as the market is meandering between streaming content (Netflix/Hulu), over-the-top (OTT) video services like Amazon Instant Video, MLB At Bat, HBO Now, etc., and direct purchase video like iTunes or Google Play. But the wide availability of Apple TV devices, entrenchment of iTunes in the life of lots of music consumers, and disposable income mean that a video content purveyor is highly likely to hit iTunes first – as we often see happen with movies today.

The last one is the most interesting though.

If we look at eBooks, something interesting happened. Amazon wasn’t the first mover – not by a long shot. Microsoft made their Reader software available back in 2000. But their device strategy wasn’t harmonized with the ideas from the team building the software. It was all based around using your desktop (ew), chunky laptop (eventually chunky tablet), or Windows Pocket PC device for reading. Basically, it was trying to sell eBooks as a way to read content on Windows, not really trying to sell eBooks themselves. Amazon revealed their first Kindle in 2007. (This was the first in a line of devices that I personally loathe, because of the screen quality and flicker when you change pages.) Apple revealed the iPad, and rapidly launched iBooks in 2010, eventually taking it to the iPhone and OS X. But the first two generations of iPad were expensive, chunky device to try and read on, and iBooks not being available on the iPhone and OS X didn’t help. (Microsoft finally put down the Reader products in 2012, just ahead of the arrival of the best Windows tablets…<sigh/>) So even though Apple has a strong device story today, and a strong content play in so many other areas, they are (at least) the second fiddle in eBooks. They tout strong numbers of active iBooks users… but since every user of iOS and OS X can be an iBooks users, numbers mean little without book sales numbers behind them. Although Amazon’s value driven marketplace may not be the healthiest place for authors to publish their wares, it appears to be the number one place by far, without much potential for it to be displaced anytime soon.

If your platform isn’t in the leader for a specific type of content, pulling ahead from second place is going to be quite difficult, unless you’ve somehow found some silver bullet. If you’re in third, you have an incredible battle ahead.

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