Posts by Russ

Fast following fails.

Whenever I hear a leader in a technology business say, “We’re going to fast follow because it’s the most profitable place to be,” I know I’m looking at a failed organization. I didn’t come to this conclusion by thinking about it. I came to this conclusion by observing it repeatedly.

After observing it, however, I wanted to understand why this particular strategy fails so consistently and spectacularly. Why? To understand my theory, we need to start in a somewhat different place than business—we need to start with the nature of goals and humans.

You can place goals into two buckets: first things and second things.

First things are foundational. If you are a technology company, the first thing is building a stable, resilient, and flexible platform (or foundation). The products you sell will only be as stable as your platform. The innovation you achieve will only be as consistent as your platform is.

Second things are goals you can only achieve once you’ve built the first things.

Here’s the hard truth no one wants to hear: Generating revenue is a second thing.

Humans become what they do.

We all want to believe we can become what we desire—but we actually become what we do. In Aristotelian philosophy, this is called the virtue ethic. You become physically virtuous by exercising your body. You become intellectually virtuous by thinking about hard things.

Companies are the same way. A company can only become innovative by innovating. Innovating becomes a habit—or it doesn’t.

What does this have to do with fast following?

The theory of the “fast follower” is: “I’m going to let other people spend money on research and development, I’m going to let them carry the burden of innovating and making all the mistakes, then I’m going to jump in and scoop up their innovation.”

This seems sound at first glance. It’s a compelling story.

It doesn’t work, however, because you are chasing another organization’s success without building their platform. You’ve placed a second thing—revenue generation—in first place, and first things—building a platform and innovating—in second place.

When you put building a platform and innovating on top of that platform in second place—when you “fast follow”—you lose the habit of building a solid platform and the habit of innovating.

Building a platform on which you can actually ship innovative products—no matter who invented them—and cultivating a mindset that seeks out good innovation creates a culture of innovation. When you build the mental habit of waiting until someone else’s innovation succeeds and then building “just enough platform to make it work here, too,” you are building an unstable platform and killing innovation.

“But what about all those fast-following success stories?”

One reason “fast following” success stories abound is that you can make a lot of money for a little while with the fast-following strategy. Another is that when an organization first moves to fast following, they have the leftover platform and innovation culture to carry them for a little while.

But time will out all fast following organizations. When the market shifts, fast followers will have neither the platform to shift with it nor the innovation to change with the market.

By putting second things first, the fast follower loses the first things that make the second thing possible.

“But I’ll make a lot of money until it fails, right? I don’t care about the future, just making a lot of money quickly!”

Sure, if that’s the life you want to lead, go for it. If you want to live a life devoid of community, and you want to lie on your deathbed and say, “I don’t care what damage I caused,” if sheer wealth is all that matters, feel free to fast follow.

If you want to build something, however, go build it.

Fast following gives up building platforms and innovating for immediate success, and winds up failing to innovate or succeed.