Book Review

Will and Vision, Gerard Tellis and Peter Golder

Pioneers Fail to Corner Markets
By Harvey Schachter Published: January 16, 2002

When Gerard Tellis and Peter Golder first presented their research findings in the mid-nineties debunking the notion that the first movers into markets sew up an unbeatable advantage, they were challenging a business truism. But after a decade of research into 66 different markets -- including many chosen specifically because they might defy their early findings -- they have shown conclusively that latecomers, not pioneers, grow to dominate markets.
The first-mover truism is actually myth, even in the high-tech and digital worlds. "What we found is that the patterns of enduring success are as valid today for Bill Gates, Steve Case, and Jeff Bezos as they were over 100 years ago for George Eastman, King Gillette, Henry Ford and other entrepreneurs whose names and businesses still endure," the two business professors write in Will and Vision.
In large measure, that's because we easily forget who was first in a market, or because the victors rewrite history. Procter & Gamble, for example, claimed that it "literally created the disposal diaper business in the United States," which is true -- but it definitely wasn't the first into the market. Gillette did not invent the safety razor; many cameras existed for professional photographers before Kodak produced one for the public; and VCRs were available for the broadcasting industry before Sony developed them for the mass market. Amazon.com was not the first on-line bookstore, nor Netscape or Microsoft Explorer the first on-line browsers.
On average, leaders enter the market 19 years after the pioneers. Even high-tech and digital leaders tend to enter it seven years after the originators. Overall, pioneers maintained market leadership for a median of five years. So what does it take to win market leadership? The researchers found five factors: vision, persistence, relentless innovation, financial commitment, and asset leverage.
Vision: Be it Bill Gates talking about a computer on every desk back in the 1970s, or Procter & Gamble spending years learning to mass produce a cheap disposable diaper, market leaders hold a firm vision of serving the mass market.

Persistence: It took Sony nearly 20 years to develop the VCR. Most of today's market leaders similarly showed a will to persist through many long years to overcome huge obstacles.

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