Below is the ‘Tip of the Week’ from Ep91: SpaceX & Elon Musk’s Mission to Mars, Part 2 (Tim Urban)
In today’s interview, Tim talked about the challenge for first movers. Not only do they…
1. have to build a business and
2. have to innovate & develop new technology;
3. but they also have to teach the world about the importance of this new industry.
The first internet service provider’s biggest opportunity came not from converting a small number of internet users; but rather getting non-internet users to use the internet.
The early automobile maker’s biggest challenge was not convincing people why they should buy their brand; but rather why they should consider purchasing an automobile in the first place.
Even a more modern example, take a company like Fitbit. They may have gotten early traction with consumers that already had GPS and health monitoring fitness watches; but the big opportunity that they capitalized on was getting the mass market to see the benefit of wearing a Fitbit all-day, everyday.
The First Mover in a space clearly has tremendous opportunity, but therein faces a dilemma. This is related to the concept we often hear about “Competing against non-consumption.” Often the single biggest competitor for any company, in any sector, is non-consumption. There are always far more people out there that could be using your product, but aren’t using anything. And this is why I dislike seeing startup pitch slides that talk about the competition. If one is addressing a real pain point, in a unique way, they will be creating a new market where the challenge is to convince non-users to become users. This even relates to raising venture capital and growing the base of angel investors. I’ve spoken with a number of high-net-worth individuals about startups and angel investing. And, incredibly, the conversation is rarely about why they should invest alongside me instead of another venture investor. Rather, it’s often about why they should be investing in this asset class at all. The unknown, risky, black-box that is venture is still very real. Even VC fund managers are competing against non-consumption. Ask anyone with a million dollars of net-worth, “What percentage of your portfolio is allocated to venture capital?” You may get more confused looks than answers.
Behind every great innovator is a great storyteller. Elon understood that and Tim articulated it. Before consumer adoption, there must be awareness and understanding. And the first mover’s dilemma is not one of competition but rather non-consumption.