Is Second Best Really the Best?

Here’s why it may be a winning business strategy after all.

If you’re not first you’re last.

That’s the, somewhat comical, and all-too-often serious perception we have on running a business today. But is it true? Is it possible to still be a leader in your marketplace if you’re a slower adopter of technology, if you don’t perform as well as your competitors, or even offer an inferior product or service?

I’m going to address this in two ways.

Number one: Product quality.

Sometimes being number two in this space is advantageous.

More often than not, you have a product that technically, (if you speak to the engineers or technicians, or the geeks that understand it) is inferior to the one that is in the first place. It’s a second rate product, if you will, and it’s not as good as the premium one in the industry. Yet the second best one is the one that seems to outsell the best in class one. That’s a function of the gestalt; of all of the pieces besides the actual product working together better than the competitor.

If you go back to your “four P’s of Marketing” theory class from college, you’ll know that product is only one of those P’s, price and promotion and place are the other three. So the second best product that outsells the technically better one is a function of the other three P’s working better for it. Or, more correctly, a function of all four P’s working synergistically to create a hero product that (technically) isn’t as spectacular, but sells better.

Now, that raises a whole raft of other issues. What it speaks to is the need for you to look at things holistically. Just because you build a better mousetrap doesn’t mean, as the saying goes, that people will beat a path to your door. People need to know that you have the better mousetrap, somehow. You need to promote it, you need to put it in the place where people are looking for mousetraps (something easy to do with the digital universe today). And you need to price it appropriately. You may have the absolute best mousetrap, but if you charge far too much for it, then people are going to say that getting rid of a mouse just isn’t worth $150,000.

So, as you build your product, as you bring your offering to market, do so with the other elements in mind; move all of them to forward together. And maybe throw in a little bit of luck.

All too often, one function gets carried away at the expense of the others.

For example, maybe the engineers got a bit carried away with that product and put all sorts of bells and whistles in it, making it expensive or inefficient to manufacture. There’s only so much you can do when it’s hard and pricey to make your product.

Whereas, if the marketing folks, the distribution folks, the engineering folks, and the technicians that will build it are all working together, then the whole is brought to the market in a more efficient, more synergistic way.

That is why the “second place” products sometimes vastly outsell their technically superior counterparts. It’s about the sum of the whole, not just doing one thing really well and leaving out all the other important parts of the marketing mix.

Number two: Chronologically.

Being the second is sequence is also advantageous.

One of my favorite quotes is from David Glass, a former CEO of Walmart: “He that reinvents his industry, wins.”

Walmart did not invent retailing. They reinvented it; then they owned it. FedEx did not invent overnight freight, but they own it now… it’s basically a verb. Surprisingly, Google didn’t invent internet search, but they own it now. Apple didn’t invent music distribution, but they (used to) own it.

There is an advantage to being the second to market, in other words. The advantage is you get to learn from the tuition paid by others. You get to watch and observe, see what they did well and what they did wrong. You get to take what went okay (let’s say MS DOS) and then turn it into Windows.

So don’t be sad if you are second-to-market.

Yes, being first to market has its advantages, but the second to market also has a distinct list of really impressive advantages. You get to learn from those that went before, you get to make a version 2.0 based on what others learned at 1.0. And you get to see how the market reacts to this feature or that improvement, this promotion or that, or whatever other mistakes or good decisions the leader made.

This doesn’t just apply to reinventing your space. It can apply to downloading the latest software or being a later adopter of new technologies. While sometimes the leader gets it right the first time, more often than not the ones who delay just enough to catch errors and room for improvements benefit in the long run. At the same time, waiting too long means you’ll get left behind. Don’t be too hot or too cold — be just right. My experience has shown that being second can be just right.

I think, all too often, that companies and entrepreneurs are looking for the “next big thing.” Maybe a better pattern to engage in is a reinvention of previous “big things.”

Who’s going to reinvent social media, such that it actually becomes helpful and productive and a blessing in our lives? Who’s going to reinvent internet search, such that I can feel comfortable and confident that my search is mine and mine alone, and my data isn’t being sold to a whole bunch of other people that I don’t even know?

Here’s one: who’s going to reinvent government? Who will make the government actually work for the people that fund it (the taxpayers) as opposed to just serve themselves and give us nothing in return besides the embarrassing entertainment from all the nonsense they get up to?

Reinvention has power, so don’t be afraid to be a reinventor as opposed to an inventor. As the saying goes, sometimes first is the worst and second is the best.

Aaron Webber is a serial entrepreneur and CEO of Webber Investments LLC, as well as a Managing Partner at Madison Wall Agencies.

If you liked this post, please press the clap button and leave any questions or comments below.