Product Innovation: If Leading Looks Hard, how about being a Fast Follower?
Product innovation doesn't have to be cutting edge to work. A fast-follower strategy, that is one that relies on quickly imitating innovations pioneered by others, has been effectively employed by organizations such as the United States Department of Defense and Korean conglomerates as well as smaller enterprises.
Fast following, instead of trying to be a product innovation pioneer, can be especially effective when standards and technology evolve rapidly.
“It is a very good strategy," says Peter Gillett, founder and CEO of New York City-based mobile lead capture platform Zuant. "If there's a major new technology that becomes available, you can sit back and see that there are a number of different ways to make it work."
If you're going to be a fast follower, speed is paramount. Otherwise your market opportunity will diminish as you move ahead.
—Peter Gillett, founder and CEO, Zuant
An obvious and important benefit of fast following is that it can avoid the risks of pioneering product innovation. When a business is devoted to creating a truly original product or service, it can require lots of time, money and energy, with no guarantee of producing a workable result.
“The pioneers have all the costs for R&D, the failures and the time involved," Gillett says. “The fast follower can just cherrypick the best technology that emerges."
Even if an original idea proves practical, the market may not embrace it. In that case, again, a sizable investment in product innovation may produce little of value.
“Innovation is really hard," says Patric Palm, CEO and co-founder of Favro
, a planning and collaboration app based in Uppsala, Sweden. “It is obviously much cheaper to be a follower."
Hazards of Fast Following Product Innovation
While fast following can help reduce the risks of pioneering product innovation, it has its own risks.
One possibility is that a fast follower may prompt legal action, with the originator claiming violation of their patent, copyright, trademark or other intellectual property. Lawsuits can tie up resources for long periods and result in costly settlements.
Another risk is that a fast follower could fail to produce something the market finds compelling enough to substitute the original.
“I don't think it's a good idea to be a follower if you're only going to come in with a me-too product or service," says Gillett. “It's only worth doing if you're going to follow with a product or service that's much better in some way."
Even fast followers need to come up with something extra to distinguish their product from others.
“If all you do is fast follow and you don't have any other innovation, there is the danger that you become a pale copy of your competitors," Palm warns.
Formulas for Fast Followers
One key to successful fast following is to do it as soon as possible after a pioneer introduces a successful feature or technology. Delay could let the pioneer build a hard-to-beat first mover advantage, Gillett says.
He points to the way the company that pioneered web-based consumer relationship management software in the 1990s has continued to dominate despite many competitors entering the field in recent years.
“If you're going to be a fast follower, speed is paramount," Gillett concludes. “Otherwise your market opportunity will diminish as you move ahead."
Assuming fast following happens quickly enough, the next requirement is to leverage the follower's strengths to create something that appeals to the market. Strengths such as location, ability to scale quickly and access to labor or other resources can be used to add value to a fast follower offering.
A marketing edge could also supply the needed difference, Palm says.
“If you're a company with a distinct brand and a strong flavor in everything you do, this is easier," he says.
Fast Following's Future
Assuming the speed of business and technological change is sustained or increases, fast following may become a more standard way to compete.
“I think you're going to see a lot more of it on a global stage," Gillett says. He points to the success of ride-sharing apps introduced by fast followers in regions and markets around the world that had been overlooked by the industry leaders that pioneered the concept.
Even for firms that opt for being a pioneering innovator, fast following is likely to become a more important part of their strategy toolkit, Palm says.
“Everything moves much faster today and if you're in a space where a competitor is introducing a certain service or feature and the market expects you to have it, it can be very dangerous to not follow," Palm says. “The risk of not following fast might be a much bigger risk."
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