Today on Sequence Over Strategy, Michelle Warner is talking about how to identify when you’re benefiting from First Mover Advantage, and how to tell when it’s about to come crashing down, so you can get out, pivot, or change your expectations before it’s too late.
What does First Mover Advantage look like when we’re talking about marketing strategies? At first, it looks like a lot of well-earned success, but then the wave crests and what used to work doesn’t anymore. Today on Sequence Over Strategy, Michelle Warner is talking about how to identify when you’re benefiting from First Mover Advantage, and how to tell when it’s about to come crashing down, so you can get out, pivot, or change your expectations before it’s too late.
Check out the full episode at TheMichelleWarner.com
Hi, I'm Michelle Warner and I'm a business designer and strategist. In the 15 years I've done this work, I have noticed the same trend everywhere.
Business owners are falling into a trap of centering strategies first, when what they actually need to be centering is sequence. Because the reality in building your business is that the steps you take and the order in which you take them is more important than how well you implement any single strategy. And that's why this show exists. On Sequence Over Strategy, my goal is to fix that by helping you find and trust your own sequence of actions rather than blindly follow someone else's strategy.
Today's question is a fun one because it's group sourced actually. And it's group sourced from a recent tiny and strong call, which is my monthly round table where we get together as a community to talk shop. It's totally free and you are welcome to join us.
Here's the question:
"Michelle, I frequently hear you say, you can't get away with that anymore, or that stopped working in the last few years, when you're talking about different marketing strategies. In particular, you're talking about it a lot right now with social media. I understand that and I see that happening, but why can you so confidently say that? How do you know that something has stopped working? And more importantly, how do you spot it before it's too late?"
Friends, I could talk about this topic all day long, and the answer is one of the most foundational skills you can build for yourself, because when you understand this, when you can spot this in the wild, you are giving yourself two incredibly valuable things:
Number one, you're giving yourself peace of mind that you're not doing something wrong.
Especially in your marketing, it is so easy when a marketing tactic stops working to blame yourself and to start thinking that you have all of a sudden forgotten how to market, but maybe there's something else going on. And so when you can spot this other thing that's going on, you're gonna be able to give yourself that peace of mind that you, in fact, have not forgotten how to market.
(Number two) And you're also gonna give yourself. An unfair advantage to be able to actually take advantage of things while they work and get out before you waste too much time, once they stop working.
So given those stakes, it is a no-brainer for you to stick with me today. This is the good stuff that'll serve you daily, as long as you have a business.
Back to Business School
But I have to put a caveat in here to answer this question. We're gonna have to go back in time and take a stop in business school for a minute. I promise. This is not gonna be calculus, it's not gonna be painful, and you're not gonna have to go to the in-house bar during the halfway point to down a few shots of vodka the way my classmates and I occasionally had to do when sitting through three hour accounting classes back in those days.
I mean, did I just admit that? Was that too much information? Just ignore me. Never happened. Never happened. I have full deniability. But I am gonna need you to understand an economic concept called first mover advantage. Let's start with a definition straight from good old Google:
“In marketing strategy, First Mover Advantage is the competitive advantage gained by the initial first moving significant occupant of a market segment. First mover Advantage enables a company or firm to establish strong brand recognition, customer loyalty, and early purchase of resources before other competitors enter the market segment.”
Let's translate that to plain English, huh? In plain English. First mover advantage most commonly refers to the benefit A company gains by being the first one to enter a market segment, most obvious example, Amazon. Back in the day, Amazon had First Mover Advantage when it came to e-commerce for book selling.
And we can all see how that's worked out for them. And you know, we can also all see how it's not worked out so great. For the competitors in that space who didn't take advantage of that first mover advantage? I mean, does anybody remember their local borders books?
Okay, so now that we know that traditional definition of First Mover Advantage, which is very much related to a product entering a market.
I'm going to also argue that there is a version of first mover advantage that can be gained by the users when they are in the first ways of using a new product or technology, or offer within a product.
Stick with me.
Some of you might think of this as first adopters, but that's a different thing. What we're talking about today is a First Mover Advantage for the first companies or people or solo entrepreneurs who take advantage of a new product or service, and by doing so, experience either a temporary or sustained advantage over their peers by doing so.
And friends, it is very common to see this in small businesses, who are reliant on digital technology to market their business. I mean, sound familiar? 'Cause likely that is most of you. And because of that, most of you are knowingly or unknowingly riding this wave of First Mover Advantages. And when that wave comes crashing down, that's when you're gooing start to hear me saying, “this doesn't work anymore.”Or “You can't get away with that anymore.” It's because whether you knew it or not, you were benefiting from a form of First Mover Advantage. And as soon as that advantage becomes smaller in size or disappears entirely, so does your benefit, the benefit, here, being it working. And so when that benefit goes away, the marketing stops working.
So the goal then, to get over this and to be able to recognize this and to be able to protect yourself from it. Is to understand how to spot these advantages. So one, you know, when you're benefiting from them, and two, you know how to read that wave and get out when the benefit disappears. Let's use a recent dramatic example to illustrate what this looks like.
LinkedIn News Letters
Let's use a recent dramatic example to illustrate what this looks like. Because I know I was just talking about a lot of different theory. In late 2021, and a lot of, you'll probably remember this, LinkedIn began offering users who had access to its creator mode, a new feature. That new feature was something called LinkedIn newsletters, and this is a classic example of something new coming to market that people in digital marketing running digital businesses are gonna have access to.
LinkedIn newsletters were a new way to reach your own LinkedIn followers and to bridge the gap between LinkedIn as a social media platform and your followers inboxes, because it literally sent a newsletter created in LinkedIn to a follower's email inbox. The obvious benefit to users who adopted this feature was that they could reach more people in their inboxes.
No longer did they need to try and convert all of their LinkedIn followers to their independent newsletters. We didn't need to make that conversion because LinkedIn was offering this new product, this new feature, LinkedIn newsletters, which gave them the ability to reach inboxes without that intermediate and difficult stop of asking people to go from the LinkedIn platform to opting into an independent email list.
It sounded amazing, right? There's lots of advantages to this. I just told you it is hard to move your LinkedIn followers to your email list, and LinkedIn was saying: “don't even worry about it. We will take that and we will send it to your followers and it will reach their inbox.” And wow. Did I see some first mover advantage going down for a few months.
At the time, I had a few clients who had been very active on LinkedIn, and so they had early access to this feature. They saw the benefit that I just described, namely that they would be able to reach their followers on more than one platform, and they jumped to get their LinkedIn newsletters up and running almost immediately when this feature became available. And the results were mind bending. The newsletters were new. People were curious, open rates were sky high and sales revenue, and even traditional list growth boomed. So even that difficult thing of getting people to move from LinkedIn to your email newsletter, it all boomed.
It was what looked like a true gold rush. And during that time, we pushed hard in those early months because it was also fairly obvious that this was going to be a temporary first mover advantage. The writing was on the wall, that LinkedIn was gonna roll this out to everyone, or at least make it much easier to access this tool.
And we knew that shortly after they did. So the results would likely crash. AKA first mover advantage would be gone. AKA I would be saying: “Hey, that doesn't work anymore.” Why? Because instead of one novel thing coming into a follower's inbox, as soon as a bunch of people adopted this. End users were gonna be inundated with these LinkedIn newsletters.
Everyone and their brother would have one of these newsletters, which means every end user would quickly begin to ignore, block, maybe even mark these things as spam. So what early on was seen as novel and interesting and exciting to open. We knew would very quickly have a lot of people frustrated and not interested in opening these.
And that's exactly what happened.
After taking advantage of the first mover advantage for a few months, where we saw all this wonderful growth, we saw that advantage, we saw that impact, we saw that growth crash and crash badly in less than a year. All the positives were gone. AKA, it's not working anymore.
And the reason it wasn't working wasn't because of anything my clients did, and pay attention to this, 'cause you're likely blaming yourself for some of these things too.
My clients didn't forget how to write a newsletter. They didn't forget what their audience cared about. They didn't forget. They didn't become bad marketers to their audience overnight, but because the advantage was gone with this particular tool, it didn't matter that they were still doing a good job. The tool stopped working for them. In our case, this was fine and expected. We had recognized that this was a first mover advantage that we could take care of, and we had also recognized that it was gonna be temporary.
So you know what? We were going to take advantage of it for as long as we could, and it was real, and those leads stuck around. They continued to turn into sales, and all of those are good things. That's the benefit of taking advantage of an unfair advantage when you have this first mover going on.
What did we also do? We also stopped worrying about LinkedIn newsletters. As soon as we saw the crash, we were waiting for it. We knew what this graph would look like. We knew that we were in there taking advantage of something that was temporary. And so we were prepared, and when it came, we knew immediately what we were looking for. We knew immediately that the ROI of spending any time worrying about that channel wasn't gonna be there. There's not gonna be any kind of ROI associated with it.
And so we exited. We stopped worrying about LinkedIn newsletters. We said thank you. We're thrilled to have taken advantage of it while this was available to us. And now we're out. Because we could read the writing on the wall. It wasn't going to work anymore. That's the key. When you can recognize a first mover advantage in the wild for what it is, please celebrate it.
Take advantage of it all day long, and then be grateful for it while running for the fences. As soon as that advantage runs out and that advantage will run out.
Here's a difference between first mover advantage when we're talking about products and entering a market. And first mover advantage when we're talking about taking advantage of a marketing tool.
Unlike some traditional product first mover advantages where a company like Amazon, who's first in the game to sell books online has been able to create a permanent first mover advantage. Most, if not all, marketing based first mover advantages are going to be temporary. Some will be extremely temporary, like this LinkedIn newsletter example.
That's why I chose it as an example because we can look at that over the course of less than a year and see that dynamic at play. And it's very obviously at play. Others are still gonna be temporary, but it's gonna be on a more extended trajectory. And those are admittedly harder to spot in the moment and they're harder to judge when to exit.
And they're the things you're talking about when I say: “Hey, this isn't working anymore,” or “You can't get away with it.” The same movement is happening. It's just happening in a much more subtle and extended way than it did with LinkedIn newsletters. So let's zoom back out to the examples I'm usually referring to, and I was referring to when this came up at the Tiny and Strong Talk the other week.
First Mover Advantages in Social Media
Lately, almost all of these examples have been social media based, and if we look close enough, we can see the exact same factors at play. Again, it's just over an extended period of time, so it's a little harder to spot, but the exact same factors are at play. And so let's talk about one that I've been hearing a lot about recently, and that's the effectiveness and reach of LinkedIn posts.
A few years ago, LinkedIn wasn't talked about as much when it came to a marketing strategy. Before you call me out on this, I know people have been using it for years, but the volume of creation of content on LinkedIn was a less popular strategy until Covid hit, and when Covid happened, it really exploded.
And I think that happened for a lot of reasons related to how our lives changed during that time. But when Covid happened, LinkedIn really exploded. It really took off and it worked whether you were selling B2B or B two E, which I call B to Entrepreneur or even some B2C people were on LinkedIn and they were seeing content and they were buying off of that content.
There was a first mover advantage created by the influx of people searching for a way to connect. As soon as their in-person lives shut down. Everybody came in, home offices happened, and they got on LinkedIn looking to connect. So what happened there? All of a sudden there's a first mover advantage because there's a brand new audience there ready for content.
And so those who had been on LinkedIn prior to that happening or who from other skills knew how to create social content, maybe from having using other platforms thrived. But now everyone's figured it out, haven't they? They've had a few years. And what do we see now? LinkedIn is really, really noisy. I mean, it may even be noisier than Facebook was during its peak.
The first mover advantage wave is cresting if not having already crashed. So what do we expect to see as it crests and then crashes? Well, we expect to see it work less and less. Same with LinkedIn newsletters, and that is exactly what we're seeing. And it's exactly what I mean when I say: “that's not working anymore,” or “you used to be able to get away with that.”
That's the other thing that happens when you have a first mover advantage. Things that shouldn't work that great because they're not in perfect alignment with the rest of your business model, do work. So I consider LinkedIn a traffic marketing strategy. If you're posting content on LinkedIn all day long, that is traffic marketing.
And if your business, your product mix is more in alignment with relationship strategy. You may have been getting away with this for the past few years. During the covid years, you may have been able to get away with posting on LinkedIn and still connecting with and finding clients, and that's because you were within the wave of an unfair advantage.
And when you're within the wave of an unfair advantage, you either get outsized results or you get results where you shouldn't have gotten results. And when that unfair advantage goes away. You're not going to get those results that you should not have been getting, or you're no longer gonna see the outside results.
That's just the reality of a first mover advantage as it slips away. And that comes back to what I'm saying, if it's not working anymore or if you used to be able to get away with that, what I'm really saying is: “Hey, there was a first mover advantage and you were taking advantage of it, and good for you for doing that, but what you didn't know was that was happening. And so we need you to recognize that it's happening so that you are prepared for your exit plan and you understand the conditions that you're taking advantage of, because please take advantage of them. But also, please be aware that you're taking advantage of something that is not going to be around forever, so that you're watching for those signs and you're getting out when you need to get out, and you have a backup plan when you need a backup plan.
Quick Review
Okay. I just threw a lot at you. We got a little technical. So let's review and let's repeat some of the things that I just went over because I want you to leave this episode being able to start spotting for yourself when you are benefiting from a First Mover Advantage. And I also want you to be able to start thinking about when that advantage might be running out, so that you can pivot your time and resources and make sure you're not wasting time, you're not wasting years chasing after strategies that are no longer working.
First reminder. A First Mover Advantage, as I am referring to it in relation to marketing, is an advantage you are gaining by being one of the first to use a new idea, technology or piece of technology as it relates to your marketing. AKA LinkedIn rolls out LinkedIn newsletters and you jump on it. That is you taking advantage of having a first moving moment.
This advantage is generally temporary as it relates to marketing. I'm gonna repeat that this advantage is temporary when we are talking about it in terms of marketing, whereas when we are talking about it in terms of product-based, first mover advantage, it is very possible it can be permanent. But when we are talking about you using it within a marketing context and with a marketing advantage, I would say 90% or higher of the time, it's going to be temporary.
So since it is a temporary advantage, your job to protect yourself is twofold. Number one, it is to spot First Mover Advantages when they appear so you can take advantage of them until they run out. And then it's also to be able to spot those signs that the advantage is running out. So you don't, one, blame yourself for suddenly being terrible at marketing.
And I'm not being funny here. A lot of people who are stuck on the downside of a first mover advantage tell me and beat themselves up, that they have forgotten how to market. They've lost this skill. It's not true. You've not become a bad marketer overnight. You've just lost your advantage, and I don't want you in those moments to doubt yourself, blame yourself, or to keep pounding a dead drum, wondering where your results went and lose years of time continuing to try to make the same thing happen because it used to work. It's not gonna work anymore. If you're at the end of that advantage, you're just not gonna get the same results. They're not going to come back in the same way.
Finding First Mover Advantage, and Predicting the Crash
So what's the best way to accomplish those things?
Let's talk first about finding First Mover Advantage. To find and to take advantage of this I want you to look for things that take advantage of what you're already good at and what you can deploy relatively quickly. That's what you wanna keep your eye out for. This is another thing people screw up because to take full advantage of one of these since they are temporary and they can be very fleetingly temporary.
You don't wanna have to learn a new skill or hire a new team just to take advantage of something that's gonna go away. Again, the LinkedIn newsletters example is a great example of this. My clients who were able to take the best advantage of that moment were already producing content that could easily be adapted to the format, and they already had strong reach on LinkedIn.
The effort was up and running in less than two days. They didn't have to go figure out how to write a newsletter, figure out how to do this or that. If you find yourself having to try to figure something out, it is likely you are gonna be on the back end of that wave. So you are better off paying attention to advantages that you see forming in places you are already great at.
So if you're already great at producing content, when does a new content platform appear that you can jump on within a day? That's the type of thing that you want to jump on. And then secondly, how do you know that the wave is cresting or that time is running out? Well. The first thing you can do is be proactive about this.
Now that you know that first mover advantage is a thing when you decide to jump in, take two minutes. Remember your sequence, take two minutes before you jump in to ask yourself, what is this going to look like when the advantage starts to disappear? What are gonna be those indicators I see that start happening that tell me, “Hey, gold rush is almost over.”
I'm going back to the LinkedIn newsletters example, 'cause it's such a strong one. When we decided to jump in with a couple of my clients, we knew that as soon as the feature was universally available, it's crash would likely come quickly. So we watched for that and we were ready to jump ship as soon as we saw the first signs of it.
And we did that because we knew the ROI was gonna crash very quickly and we didn't wanna waste resources on it. We wanted to get in. Take as much advantage as we could and then get out just as quickly. And that's really easy when it's a very temporary advantage. But when it's one of these longer term advantages that's going away, it can be more subtle.
And this is what's happening with social media right now. This is why it's a little harder to see, but in those cases, you can still be proactive about this. You can ask yourself: “is there an internal reason why I've suddenly, seemingly become bad at this skill?” Instead of just blaming yourself for forgetting how to market overnight, ask yourself a few questions:
If not, and overwhelmingly the answer here is that no nothing has changed. Well, then you are likely starting to see the crust of the wave start preparing for the crash.
Don't waste time blaming yourself. Don't waste time trying to figure out what have you forgotten? What have you not learned? Instead, start asking yourself: “huh? Is this the crest of the wave? What should we be preparing for?” And then the second thing you can look for is you can ask yourself: “are unskilled and unprepared people all of a sudden all around me? And are they providing competition for the attention I'm looking to gain?”
We're seeing this all over LinkedIn right now, right? What did I say? Are the people who get the most advantage from first mover advantage? It's the people who have a skill. It's the people who are ready to take advantage of it.
When everybody else starts rolling in and you start seeing people around you who are not up to snuff and who are not up to your same level, that is a really good sign that the masses have arrived. And again, we're seeing this all over LinkedIn right now. Seeing lower and lower quality every single day, and what comes with lower quality, generally a lot more quantity and a lot more noise.
So what does that tell us?
It tells us that the masses have arrived and the crash is likely in progress, and when that happens, the answer is not to say: “how can I get better at this?” The answer is to say: “okay. Maybe I stick around because it's one of my core marketing channels, but I can no longer count on this to perform in the way that it always has because any first mover advantage that I had by being on this platform relatively early by being one of the first people here, by being here before the masses, that's gone now. And so I should not expect those same results anymore. It's not working in the way it used to work. So maybe I keep doing it because maybe it's a core channel.”
And I'm not telling you to turn things off immediately. I am telling you to, you know, stop beating that dead drum and start looking for what can you add to your channel? Where can you go and make up those same numbers that are now unlikely to be available to you in the way that they used to be in whichever channel you've been using and whichever tool you've been using where you've had an advantage?
So again, in both of these cases, you don't necessarily wanna jump ship, but you do wanna adjust your expectations quickly about how this is going to perform.
Start experimenting with new avenues that can make up what you're losing. That's how you respond in a really steady way to marketing changes and to marketing advantages that are always gonna be coming in and coming out. It's not staying committed to the one thing, and it's instead staying a step or two ahead of the masses before they figure out that it's crashed.
Move on yourself. Have your next plan. Be on the lookout for the new opportunities that you can take advantage of.
All right. Thank you so much for going back to Business School with me today. I hope this episode was helpful. Again, I know we got a little technical, but this is the stuff that is so important. If you can spot these things, if you can even know in the back of your mind that these types of forces are at work, you are gonna be in such a better place than somebody else who doesn't know, because you're gonna have the little devil on your shoulder asking you all the time: “Hey, what's going on here?” Is that a first mover advantage that's disappearing?”
And when you have that little devil on your shoulder, when you have someone that voice in the back of your mind, and it can be my voice, come back to this episode over and over again. When you have that, when you're aware of it, that is 90% of the battle because you will be aware of it, and once you're aware of it, you will start to make different decisions with the sequence of things that you do, and you won't stay committed to anyone's strategy, whose time may be dwindling.
So thank you for being here. Thank you for going down this road with me today. And as a reminder, I will be back every other week with a new episode of Sequence Over Strategy. So make sure you subscribe so you don't miss an episode. And if you found this episode helpful, I'd be so grateful if you'd leave a review.
This is our fifth episode, and it has just been a blast hearing from so many of you who have found such use out of this episode.
I'm so, so, so grateful for that and I appreciate all of you who have left a review. And I would ask if you feel called to leave your own because that helps the show reach more people and it just lights me up every time I hear from somebody who has found the show and has found some real answers within the show, because that is my goal for it. So thank you in advance if you feel called to do that.
And finally, if you'd like me to answer your question on this podcast, please head over to themichellewarner.com slash sos and tell me what you're wrestling with. I would absolutely love to tackle it on a feature episode.