Business: Why You Should Always Seek a First Mover’s Advantage
Studies have shown that there’s a slight advantage in Chess for whoever makes the first move
“What do you think about opening a frozen Yogurt shop ?”
I’ve been asked this question at least 10 times the past year. They wanna start some kind of business and I guess frozen yogurt’s appealing since it’s trendy. The problem is that it’s 2013 and there’s already almost one on every street. Maybe if it was 2006 it could be a good idea, but I like opportunities where the odds are in my favor rather than stacked against me.
In the 22 Immutable Laws of Marketing, the authors claim that “It’s Better to be the First, Than it is to be Better”. Everyone remembers Charles Lindbergh for being the first to fly over the Atlantic Ocean, but who remembers #2? If you look at the YouTube top 100 most subscribed, a lot of the guys started back in 2006. If all things are equal, the guy starting in 2006 has a better chance of cracking the top 100 than him starting in 2013.
Advantages of Being a First Mover
When a new market’s created, there’s something I like to call market inefficiency. It’s like the wild west because there aren’t as many rules and regulations. You can really push the edges because there aren’t none.
The most simple advantage of being first is there just aren’t that many competitors. The consumer has less choices. I’m more likely to be profitable if I am the only guy selling Coconuts on the beach, compared to competing against 15 other vendors.
Switching costs. Evernote was my first online note taking program. I’ve tried others since then, but I keep coming back to Evernote because of the switching costs. I don’t want to export and re-organize my thousands of notes or learn new hot keys.
Being a first mover is like entering a marathon race. I suck at running, but I have a decent chance of competing if I start running 30 minutes before everyone else does.
The First Movers Advantage in Internet Marketing
Now lets apply these to internet marketing. I’ve been in the game 5 years and I’ve made a lot of money from spotting opportunities and hopping on them early before the rest of the industry does. Lets explore some scenarios.
New Verticals / Offers / Niches
This is big. Every year there are completely new offers and the guys that jump in early often end up being the most. In 2008 we saw the rise of health / beauty offers, Penny Auctions came out of nowhere in 2009, mobile marketing gained traction in 2011, and a lot of guys made money from Adult Dating in 2012. I already see what will dominate 2013. You build momentum, gain experience, and your advantages start snowballing.
New Traffic Source
Running Facebook in 2007 was insane compared to where it is now. More verticals were allowed, they were lenient on ad approvals, they routinely gave you higher spend limits, you could run multiple accounts without issues, etc. Now Facebook has grown up and they don’t like us anymore :-(.
Utilize New Features
Traffic sources are always adding in new features, targeting, publishers, and ad formats. Be in the loop and hop on early.
Lets go back to opening a Frozen Yogurt shop. Maybe there’s too many Pinkberries & Yoforia’s near you, but what about finding an area that hasn’t been exposed to the fro-yo crazed? I lived in Vietnam last year and literally saw 5 shops open near my condo by the time I left. There’s a lot of money in taking profitable businesses, and just exposing them to new markets.
Same things applies for internet marketing. Advertisers are able to expand into new countries because more payment options are available and they understand how to monetize a market better. Maybe a particular angle could be old in USA, but it could be brand new to Russian eyes.
A Deeper Look for Affiliate Marketers
- Banner Blindness – An audience that hasn’t seen any ads yet will have higher click through rates.
- Duplicate Registrations – Imagine you’re doing a lead generation offer. A scenario could be a consumer signs up for Dating Website with one of your competitors (MeetSexyAsianGirls as an example). A few months later they see your ad and sign up for your offer (FindaHotAsianGirlfriend). However you don’t actually get paid for that lead. Why? The two offers may have different branding, but they have the same advertiser / database. They’re not going to pay twice for the same customer.
- Less Rules – A lot of internet marketers like to push the edge when it comes to ads and angles. Perhaps guys weren’t disclosing proper terms, or were too aggressive in some of their ads. In Mobile, ads that look like text messages have amazing CTR’s but aren’t allowed in a lot of places. In Adult Dating the same applies for “Chat” style ads. The early ones rape the market and they cause the rules to change, the new guys have to play by the new rules.
- Less Competition – Less competition means lower bid prices, more caps on offers, higher click through rates, etc.
- Access to Scarce Resources – A traffic source may have a limited amount of impressions. An awesome advertiser can have a limited budget. Get in early, take control of everything so the new guys can’t get access.
Seeing Future Trends
I don’t wanna get too detailed about how I find opportunities. Talk to the right people, listen for industry information, and watch the competition.
Another idea is instead of waiting for opportunities, create them. I see niches become hot all the time because someone came up with a new angle or an amazing landing page. Become a better marketer and not one of those retards that only make money from copying and pasting.
Have a great idea for an offer? Make it, don’t wait.
Focusing vs Trend Hopping
If you’re a dedicated reader, then you know I usually suggest focusing on a niche as opposed to jumping niche to niche. How does this article tie in with my existing ideas?
It really depends how experienced you are. If you’re brand new then I suggest focusing on a niche or traffic source, and developing your skills. Learn the fundamentals.
Google encourages employees to use 20% of their work week to pursue new topics. Perhaps you could dedicated 80% of your time towards your main money makers, and spend 20% of your time exploring new opportunities.
The more you do something, the better and more efficient your process becomes. Before you could be spending 10 hours a day working on a new campaign, but now you the maintenance phase only takes you a few hours. Now you have more time to find new winners.
Just be careful from drowning from too much opportunities. Don’t focus so much on conquering new countries that your home gets destroyed in the process.
Think about what opportunities are out there now, and how you can improve your process of spotting them.
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