Tech giants such as Apple and Google can afford to take risks on new, unproven technologies. Smaller firms cannot.
Imagine if someone other than Apple had introduced a phone without a headphone jack like the iPhone 7. When consumers reacted negatively, Apple lost face, but it didn’t lose much ground in the market. Had a smaller firm taken the same risk, the financial fallout could have forced that business to go under.
Now that consumers have had some time to get used to the jackless phone, others (like Google) are following in Apple’s footsteps. A smaller company could debut a phone without a jack today and still have a shot because a bigger company took the costly risk first.
As a business leader in the tech industry, I know smaller companies and startups rely on their agile advantages but often can’t afford to compete with the big spenders on the most cutting-edge technology. Why take the risks of hitting the market first if a more patient firm will swoop in with a better product and take advantage of the newly established space? A home run hit with a used bat counts the same as one hit with a new bat -- without the worry of stepping to the plate with an unproven tool.
The Steep Costs Of Early Starts
Companies that beat their competitors to market face unique challenges, many of which can sink small operations.
Some consumers might not believe a new product can do what it says. I usually junk marketing emails that make amazing claims because the offerings within rarely live up to the exciting copy. Today’s review-obsessed consumers rarely trust unestablished products, so early entrants into new markets often crumble to form the foundation upon which later entrants will build success.
For new products that secure a few customers, technical difficulties present another steep hurdle. According to research from Disruptive Advertising and Straight North, 84% of lead conversions occur on the first site visit. Consumers today expect that everything “just works” out of the box. People will give up quickly if a new product doesn’t prove its utility right away. If the first product is too difficult to use or navigate, the second product might not be -- and guess which one customers will prefer.
Let Others Make The Big Mistakes
You might think your product is amazing, but if consumers don’t share your enthusiasm at launch, you likely won’t have enough time or money to correct course. Too often, our egos won’t let us acknowledge that our latest product isn’t quite market-ready.
Rather than pushing to be first, we should listen to user feedback to create better products -- even if it takes a little longer. Consider the following tips to stay competitive in the tech industry without joining the race to market:
1. Use Post-Release Windows To Evaluate
We allow about six months after a product’s release before jumping into our own new offering. We consider online reviews and feedback, then decide whether the potential pros and cons of the product are worth the trouble.
Some people will always stand in line for the next iPhone, but most will buy their products long after release day. Ride the learning curves of your competitors to gain free wisdom that will help you make your product the best on the market -- even if it isn’t the first.
OnePlus has carved a successful niche in the smartphone industry by doing just that. The company openly acknowledges that it doesn’t compete with the big dogs, electing to wait a few months to gauge user feedback on competitor features before adding them to new phones. As a result, OnePlus released a phone that kept its headphone jack late in 2017, much to the delight of its target market. The phone debuted at a friendly price of $499, further distancing the product from the battleground between Apple and Samsung.
2. Leverage Your Existing Advantages
So your company didn’t introduce the new mobile interface before everyone else. That’s not a problem -- it’s an opportunity to turn your existing strengths into even bigger advantages. Take what customers already like about your products, then introduce user-tested new features that augment that experience.
According to Temkin Group, 86% of consumers who have great customer experiences are likely to make a repeat purchase, while just 13% who have terrible experiences will. When customers abandon buggy early platforms, provide a better alternative to win their next purchase and all their purchases thereafter.
We used this to our advantage with the launch of a recent website. After letting everyone else muddle through the pitfalls of implementing popular new design features, we made a late change to incorporate the best elements of those features into our existing pages, boosting traffic without interrupting the customer experience.
3. Don’t Forget The Price
Maybe your new offering is worth more money than your competitors’ initial product, but if you don’t play by established expectations, customers will either perceive you as cheap or delusional.
You should know your customers as well as you know your product. Even if you know your gadget beats your competitors' in quality, that doesn't mean your customers will embrace that fact and buy it at a higher price point. Don't price yourself out of your customers' reach -- if you do, who will rave about your high-quality products?
I like to use the fast food example when discussing this subject with my team. Sure, the dollar menu might have the cheapest items, but do the value meals provide more bang for your buck? What about the deluxe burgers -- are they worth the extra few dollars? The dollar menu is always necessary, but sometimes paying $2 more leads to higher satisfaction. Only your customers can tell you which price point is correct, so listen to them before making any big moves.
Someone always has to be first, but the fastest sprinter doesn’t always win the marathon. By exercising patience and listening to feedback, you can avoid the pitfalls of early adoption and win customers for life.
