A good example of this is Amazon. Most people believe that Amazon was the first company to market books online. This is not true. Amazon was founded in 1994 and launched in1995. That was more than twenty years ago so it shouldn’t be surprising to learn that few people can recall a company called Book Stacks Unlimited which launched a full three years earlier as Books.com. So even though the uninformed and the misinformed may cite Amazon as an example of “first to market” advantage, the well-informed would more accurately present Book Stacks Unlimited as an example of first to market “disadvantage.”
I think this particle point is so important I want to give two additional examples. The first is related to an online company that almost every young girl will relate to and the second concerns one of the best known companies on the planet.
I personally love this example because it epitomizes how someone with little business experience can break into a major industry and become a huge success in a relatively short period of time. Ipsy was founded by Michelle Phan, one of he leading online “influencers,” who parlayed her knowledge and mastery of creating Youtube makeup videos that she effectively promoted through social media to create a huge and loyal following among young girls all over the world who followed her on Instagram and Facebook. Her subscription-based makeup business recently surpassed the leading and founding company in the space, Birchbox.
Although Ipsy was late to the game, and perhaps because it was late, it had a much better understanding of the market and was able to use digital marketing techniques to grow rapidly vs. Birchbox, a company that relied on a more traditional marketing strategy that focused primarily on TV.
Last year Ipsy’s business grew almost 80% to more than $150 million. Not bad for a CEO who’s still in her 20s.
And perhaps the best example I can give you of the fallacy of first to market is none other than Uber.
I’m sure it will surprise just about everyone to learn that Travis Kalanick, the outspoken CEO of Uber did not create the ridesharing industry. The company that created the industry was called Taxi Magic and its founder was George Arison. Taxi Magic rolled out its first riders in 2008.