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The Art of Being Unreasonable: Lessons in Unconventional Thinking by Eli Broad

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Chapter 5

The Value of Being Second

Before you can be number one, sometimes you have to be number two.

For a while during the 1990s, it felt like you had to be first to get anywhere. The beginning of the Internet age seemed to reward innovation above all else. Men and women who could create totally new technologies to serve markets that no one else thought existed became wealthy and successful virtually overnight.

But what you might call the first mover advantage always has been overrated and never more so than in the early years of the new digital economy. Consider the onetime kings of the 1990s and early 2000s: Netscape, Napster, WebCrawler, and Friendster. Netscape’s browser had consumer goodwill and great market share, but Microsoft’s Internet Explorer beat it by matching its features and being bundled free into new personal computers. Napster sunk under the weight of lawsuits, losing customers to its rivals, legal and illegal. WebCrawler could claim to be the first widely used search engine, but it couldn’t keep up with the likes of Lycos or Infoseek. Friendster’s social network couldn’t match Myspace for customization and music integration. Then, a lot of these second movers were beaten out by still later comers like Google and Facebook. Who knows what may come along next?

Follow the Smart First Movers

My first move in business was a second move: building houses without basements. Other homebuilders elsewhere had done it before Kaufman and Broad, and that gave us several ...

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