By Artem Mashkov is the founder and president of DevTribe.
Friends and acquaintances frequently consult me about new business ideas that excite them. But once they inevitably research their new venture and discover that someone else had the same idea, already took it to market, and their enthusiasms sag like a deflated balloon.
These people suffer from one of the stickiest myths of entrepreneurship: the first-mover advantage, or the idea that the first person to develop an idea and bring it to market will automatically be most successful.
I'm tired of seeing this myth plant seeds of doubt in passionate, young entrepreneurs. The economists who wrote the original paper on the first-mover advantage back in 1988 released a follow-up article that disproves some of their previous claims.
It's time entrepreneurs realized that having an idea or getting a product to market first isn't what matters -- it's having the right team and drive to pull it off.
Two Cheers for Second Movers
I like to focus on the success stories of so-called "second movers." Here's the crazy thing: late starters often overtake first movers. Even if they don't end up beating the originators, dominating a significant part of a two- to three-player market is still a big win.
Avis may be No. 2 among car rental companies, but it's still eating a substantial portion of the pie. Longtime runner-up PepsiCo took the lead from Coca-Cola in 2016. And let's not forget who came out on top in the race between Google and Yahoo.
Rather than race to market, smart second movers watch first movers carefully and learn from their mistakes. Here's the truth: Second movers have a killer advantage over their predecessors and don't make the same mistakes or run into the same obstacles. First movers show weaknesses in their process. Second movers exploit those faults.
Who cares if someone else had the idea first?
The decades-long battle between General Motors and Ford might never have happened if GM hadn't embraced being a second mover. GM controlled a measly 6 percent of the market, but it had an ace in the hole -- a young VP named Alfred P. Sloan who pinpointed Ford's weakness: an obsession of making the Model T cheaper but refusing to dilute the brand by changing its design. GM diversified its products by creating a range of brands (Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac) that targeted different income brackets. By tapping into a need that Ford refused to address, Sloan was able to quickly convert a large portion of the market that Ford had created. By 1931, GM had snapped up 31 percent of the auto market, while Ford's share had hemorrhaged to 28 percent. GM stayed consistently ahead of Ford until the 2008 recession, and the two companies are still competitive today. Not bad for second place.
When your team is strong, your idea doesn't have to be new. It doesn't even have to be that good. First-string people working on a weak idea are going to see those weaknesses and pivot until they find a real competitive advantage. They're going to have the heart, guts and hustle to make things happen when it doesn't look like there's a play.
My first real investment was purchasing the cell phone store I worked at when I was in my teens. Through this entrepreneurial journey, I learned that the only worthy pattern in investments should be exceptional people. Ideas don't matter nearly as much as the team behind them.
After building my network through increasing investments, I realized that I attained an impressive rolodex: a deep bench of tech, sales, project management, account management and customer service talent. Naturally, I thought, "How can I combine all these strengths into one company?" That's when I created my brand development firm that partners with founders, celebrities and influencers. I am not the first to create a company like this, but my A-team boasts incredible talent that could probably do their own thing successfully. They work under my umbrella because they understand the vision behind the business.
Raise a Team Before Raising Capital
Don't assume that the first company to take an idea to market can see all the opportunities. What matters far more than a "great" idea is assembling a great team of people who want to be problem-solvers and solution-finders -- not necessarily inventors. An industry really only needs one Henry Ford. If you want to succeed, find your Sloans. There's no monopoly on hustle.
Artem Mashkov is the founder and president of DevTribe.