Second Movers
CASE 2 - ENTELLIUM, DIGG, PEERFLIX, ZAPPOS AND JIGSAW: SUCCESS FOR SECOND MOVERS IN E-COMMERCE.
Anyone who has watched short-track speed skating during the Winter Olympics knows that skating with the lead is no easy task. The No. 2 skater gets to conserve precious energy by drafting behind the leader. No. 2 watches the frontrunner’s every move, gauging when and where to make a bid for the gold. Now corporate America and speed skating have much in common. There are no safe leads. For companies that use the Internet as the home base for their businesses, the second-mover advantage seems even more substantial. That’s why Paul Johnston is deeply grateful to Marc Benioff. Johnston’s Seattle-based start-up, Entellium, has won hundreds of contracts against Benioff’s Salesforce.com and other competitors since it moved from Malaysia in 2004, and its revenues grew fivefold in 2005. What Johnston really likes, though, is not having to sell companies on the concept of letting an outsider host their customer relationship management software. What makes fast-following the hot strategy of the moment is the relative ease with which founders can get a start up out on the track and send it chasing the competition. Cheap open-source tools can help you deploy new business software quickly. Offshore manufacturers can quickly churn out anything from semiconductors to engine parts. The Web connects marketers to a vast pool of beta testers, while angel investors and venture capitalists, flush with new funds, stand at the ready.
Of course, fast-following isn’t as simple as saying “Me too.” To battle established leaders, you need the right product and strategy, as well as a big dose of savvy. Here’s how to show up after the starting gun and still come out on top.
Number 1: Be better, faster, cheaper, and easier
To steal business from Benioff, Johnston knew that Entellium had to offer something different. “This is true for any follower,” he says. It’s what Johnston calls the
Anyone who has watched short-track speed skating during the Winter Olympics knows that skating with the lead is no easy task. The No. 2 skater gets to conserve precious energy by drafting behind the leader. No. 2 watches the frontrunner’s every move, gauging when and where to make a bid for the gold. Now corporate America and speed skating have much in common. There are no safe leads. For companies that use the Internet as the home base for their businesses, the second-mover advantage seems even more substantial. That’s why Paul Johnston is deeply grateful to Marc Benioff. Johnston’s Seattle-based start-up, Entellium, has won hundreds of contracts against Benioff’s Salesforce.com and other competitors since it moved from Malaysia in 2004, and its revenues grew fivefold in 2005. What Johnston really likes, though, is not having to sell companies on the concept of letting an outsider host their customer relationship management software. What makes fast-following the hot strategy of the moment is the relative ease with which founders can get a start up out on the track and send it chasing the competition. Cheap open-source tools can help you deploy new business software quickly. Offshore manufacturers can quickly churn out anything from semiconductors to engine parts. The Web connects marketers to a vast pool of beta testers, while angel investors and venture capitalists, flush with new funds, stand at the ready.
Of course, fast-following isn’t as simple as saying “Me too.” To battle established leaders, you need the right product and strategy, as well as a big dose of savvy. Here’s how to show up after the starting gun and still come out on top.
Number 1: Be better, faster, cheaper, and easier
To steal business from Benioff, Johnston knew that Entellium had to offer something different. “This is true for any follower,” he says. It’s what Johnston calls the