Chapter 6. To Decide or Not to Decide, That Is the Question
"Fix the roof during the summer," versus "We'll cross that bridge when we get there."
As a general rule of thumb in business, the higher the reward, the higher the risk. Having the first-mover advantage in a market means setting the rules of the game, gaining dominant market share, and generating higher profits as long as the competition has not caught up. But all the risk is yours as well. You will be the first one to make all the mistakes, as there are no established best practices. Conversely, waiting until you have it all figured out means others will have taken the market already. All that is left is a me-too strategy, without any brand premium or competitive differentiation. Margins are small and may even be negative if the resources left over in the market turn out to be limited. All the talented people work somewhere else, suppliers are shipping to others that did place their bets in time, and investors bring their capital elsewhere, as you appear not to be in touch with the market. If there is no risk, there is likely no reward. Over time certainty increases, but the expected performance decreases.
Figure 6.1 shows there is a trade-off between the moment to make the right decision and place your bets, and the value of that decision. If you analyze too long, the window of opportunity closes; you have suffered from analysis paralysis. If you jump on a new opportunity immediately–"shoot first, ask questions later"—your ...