I don’t want to be the first

Ricardo Pérez. Professor. IE Business School

30 October 2015

Where technology is concerned, it is almost never worth being the first company to do something. It is far more profitable to be a runner up who knows how to bring added efficiency to a trend.

That’s what a senior manager in the financial sector said to me a few days ago, in reference to the changes taking place in the field. A few years ago we saw similar shifts brought by online banking, and many spent far too much on getting in there first. It wasn’t such a big deal. With the timing of someone who is in charge and knows what he is doing, his approach is centered on preparing the organization to respond to change, but without being in too big a rush. The firm will be ok. 

Being the first is almost never worth it in the field of technology. It’s far more profitable being a runner up who was capable of bringing further efficiency to a trend. The complicated aspect is being extremely capable of experimenting as you go along. As everyone knows, efficiency and experimentation do not necessarily go together well - organizations and people who are good at one of these things tend to be bad at the other. 

In the digital world, the difficult thing is to face new competitors willing to do crazy experiments, backed up by investment funds and accelerated growth. Airbnb recently bought a company that develops designer sensor-centric gadgets aimed at redefining user experiences with technology.  Airbnb’s new acquisition will definitely help it resolve problems related to its business model, starting with identification, locking of premises or anything that requires physical presence, reducing distances in terms of ease of use, and building trust vis a vis the traditional hotel experience. It seems mad, but it could work. Airbnb are willing to give it a try, and its clients will soon let it know if they like it or not. 

Those who try to copy a trend in a hurry will not achieve much. Those who begin to explore options, something that could impact an operative model or bring added value for the client, will surely make a better job of it.  Directors who focus on creating a flexible organization will be able to implement change when needed. If something works, they’ll get there in time. So if you were worried about never being the first, relax. It’s better that way.

 

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