Early = Wrong

There's been a string of Web 2.0 companies biting the dust in the recession, and as with all business failure it's well worth examining what went wrong to learn some valuable lessons.

In the case of Lookery, which has just announced it's closure, the founder himself has taken that step back to a analyse what happened, and has written up his thoughts in a very open and honest blog post: http://blog.lookery.com/2009/08/21/couldery-shouldery/

The whole thing is worth a read, but it's the last lesson he mentions that leapt out from the page for me:

Coulda-Shoulda #3. Once we sold the ad network, I fell into a bad old habit — persuading my team to build something before the market was ready for it.... This is the fourth blog post that I can find from a Lookery exec in which the primary theme is early = wrong.

It's such a common mistake of entrepreneurs (including me), that I wanted to say a bit more about it.

If you launch a new idea onto the market, it is very very hard work. You have to educate people about why your idea is a good one, how it works, and how it can help them. You have to establish your ideas value in the marketplace. You have to drive demand to something new.

If you launch a business that capitalises on an existing idea, all this work is done for you, and you can focus your resources on harnessing existing demand.

Many people think Google was the first search engine because it's the most successful. It wasn't. It was 7th to launch. Can you name the first? No. It doesn't exist anymore.

Was the Dyson the first vacuum cleaner? Did Richard Branson invent the aeroplane? Did Donald Trump invent buildings?

Even Bill Gates didn't invent the operating system, the word processor, the web browser, etc.

These highly successful billionaires didn't invent anything, and weren't first to market with their idea.

The 'First Mover Advantage' is a myth. It's the 'First Mover Curse' in reality.

If you really really want to launch something brand new - at least make sure your business is extremely well capitalised, because you'll burn through a hell of a lot of money before you make it succeed.

Better to stand on shoulders of giants, and build a successful business by improving what the market has already learned to want.