Summary: Smartcuts by BusinessNews Publishing

Author:BusinessNews Publishing
Language: eng
Format: epub
Publisher: BusinessNews Publishing
Published: 2016-09-22T00:00:00+00:00

5. Catch the waves

Another good smartcut is to hack the process of wave spotting in society. If you can identify what is going to be big in the near future and position yourself advantageously before everyone else, then you stand a very good chance of being in the right place at the right time to ride the wave.

So how do you do that? One way is to give your people time to experiment with new ideas. In 2012, Google's AdSense generated $12 billion in revenue for the company, around one-quarter of Google's total revenues. At the same time, Google's Gmail service became the world's most popular email provider. Both Gmail and AdSense started out as employee-initiated side projects for Google which then grew incredibly fast because they caught enormous waves of consumer demand. If you don't give your people to tinker, you won't even be in the water when the big waves roll in.

“Google was in the water when the waves of Internet traffic came because it was tinkering with new ideas under the umbrella of Google's famous ‘20% Time.’ Behind this concept is the idea of constantly tinkering with potential trends – having a toe in interesting waters in case waves form. This kind of budgeted experimentation helps businesses avoid being disrupted by helping them harness waves which younger competitors might otherwise use to ride past them. The best way to be in the water when the wave comes is to budget time for swimming.”

- Shane Snow

The other smart way to catch a wave is to be what's termed a fast follower rather than a first-mover. At one time, it was considered that the first-mover advantage in almost every industry was huge and valuable. It was suggested the proprietary learning the first-movers enjoyed combined with the ability to secure patents and build buyer switching costs were considerable. Today, researchers have proven definitively that you stand a much better chance of success if you're a fast follower who learns from the mistake of the first mover and who coattails on the infrastructure building they do.

The list of fast followers who have excelled in their respective industries include:

General Motors – which surpassed Ford, the pioneer.

Google – which leaped past Overture.

Facebook – which superceded MySpace.

Microsoft – which outsold Apple. “Like early pioneers crossing the American plains, first movers have to create their own wagon trails, but later movers can follow in the ruts. First movers take on the burden of educating customers, setting up infrastructure, getting regulatory approvals, and making mistakes – getting feedback and adjusting. Fast followers, on the other hand, benefit from free-rider effects. The pioneers clear the way in terms of market education and infrastructure and learn the hard lessons, so the next guys can steal what works, learn objectively from the first mover's failures, and spend more effort elsewhere. Many of the biggest corporate successes in history have been fast followers in their respective spaces.”

- Shane Snow

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