The Need for Speed
When you think of competitive advantage in business, what comes to mind? Chances are that you think of proprietary technology, unique data, patents, exclusive contracts. All of these are definitely important, but one aspect of competitive advantage that is often overlooked is speed. For companies of all sizes, speed to market is a critical driver of competitive advantage.
Rapid execution means that you learn faster.
Every new product is in search of product-market fit. The sooner you can achieve product-market fit, the sooner you will be able to scale your product and create a time window of advantage (see below). Most products iterate their way to product-market fit based on real customer feedback and usage. The faster you can ship, the shorter your iteration cycles based on market feedback, and the sooner you will achieve product-market fit.
Companies that master speedy execution are thus able to get customer insight more quickly, learn faster, and iterate and improve their product more rapidly than their competitors.
You can use execution speed to create a time window of advantage.
“Lost time is never found again.” — Benjamin Franklin
One very unique property about time is that you can never regain it. Other resources (financing, customer goodwill, talent) can be gained and lost. You can always raise more money. You can repair brand and PR damage (although sometimes only with great difficulty). However, you can never regain lost time.
When you continue to execute rapidly, you can establish a time window of advantage relative to your competition. The gap between your product’s value proposition, and that of your competitors, can continue to grow.
If you don’t slip or make any mistakes, this widening gap becomes a competitive advantage in your favor. Since your competitors cannot regain the lost time, you have now established a barrier to entry for competitors to catch up on the product value proposition.
This is why you need to approach product development with a healthy sense of urgency. You want to get out ahead of the competition and stay there. When your product is not yet in market, your competitors may actually be building their own time window of advantage. And that time can never be regained.
Getting into a market early on enables you to carve out a strategic position.
There’s a saying: “Timing is everything” in business. The biggest product successes have happened when a startup recognizes a market need before the rest of the competitors in a market have spotted it. (For the purposes of this discussion, I’ll refer to the market maker as a startup, but it could also be a larger, established company that operates like a startup. Apple, Amazon, Google have all been market makers in various markets.)
The startup is able to launch the product and begin winning customers before other players wake up and react to the opportunity. In the best case, the startup’s new product remains under the radar, not yet attracting the attention of incumbents or other competitors, while continuing to grow its installed base of customers. During this time, the startup occupies and grows its strategic position in the market. The startup builds mindshare, brand, and goodwill from customers. More importantly, the startup begins to establish the norms for judging value and performance for the product category.
Now, anyone who subsequently enters the market will need to position itself against the startup who is already there. Why should prospects or customers entertain the new entrant’s product, when the existing startup has already been providing the default choice? If there is a network effect for the product category, it becomes even more difficult for a new entrant to dislodge the first mover.
It’s not impossible for a new entrant to enter the market and win significant (and even dominant) market share, especially if the market is growing rapidly. However, the bar for being the late entrant is high — you have to provide something that is disproportionately better than the first mover.
Thus, the element of time and speed again become an important competitive advantage. Becoming the first to enter an attractive market brings a strategic advantage for the first mover. And becoming the first mover — or at least avoiding being the late entrant — requires speedy execution.
Speed of execution enables you to set the tempo of the market.
If you can execute faster than your competitors to continually bring new, innovative products to the market, you will set the pace of execution for the whole market.
With each new product release, you’re setting the bar for what customers expect from your product category. Your competitors can only react to the strategic moves that you make with every successive release. They can follow your lead, they can copy your features — but you have seized the initiative, and you’re forcing the rest of the market to react.
We all know examples of companies who are fantastic at rapid execution. Competitors describe them as “relentless,” “laser-focused,” and “wicked fast.” The competitors are often left wondering, “How did they do it?” Companies who move fast put their competitors on their heels, and keep them there by continuing to introduce new, innovative products that force them to respond. These execution machines are thus able to set the tempo of the market — they shrink the product cycles for the market overall, and shrink the response times from their competitors.
In the smartphone market, this is Apple. Chris Smith of BGR recently wrote:
“The smartphone revolution started with the iPhone in 2007 when Apple told everyone touchscreens are the new norm. Many people dissed the concept, but soon everybody was scrambling to adapt their operating systems (Google’s Android was initially supposed to work on a BlackBerry-like device) and gadgets to fit the new trend. A year later, Apple introduced the App Store, another significant milestone in smartphone evolution that actually put the “smart” in smartphone. Since then, with every iPhone iteration, Apple has improved software and hardware in an increasingly more competitive mobile landscape.”
Aside from the touchscreen and the app store, Apple has been first to market with Retina display, Siri, Touch ID, high-quality cameras in the smartphone. And in each case, they’ve gotten their competitors to react and copy them.
One important note: it’s not enough to just execute rapidly. You have to build innovative, valuable products that customers need (see first point — rapid execution means that you learn faster). But if you have strong customer empathy and insight, and you are able to solve their problems — then rapid execution will provide all of the benefits above.
So don’t wait. Move fast and learn faster. Lost time is never found again. Timing is everything, and being early in a fast-growing market is super valuable. Do you feel the need? The need for speed.