Creating New Markets or why being a pioneer isn’t always an advantage

Creating New Markets: How to have the First-mover’s Advantage Despite not being the First-mover

The first-mover’s advantage invariably is a game-changer for any business. It means that you had the great fortune of stumbling upon (as we mostly do) an idea that no one else had yet thought of. Something revolutionary and new; unheard of for the general public.

Although this does not sound as much of a difficult task, yet only a few ever get to be this fortunate to actually create such an idea and then morph it into a business master-mind tactic to earn some well-deserved power.

Creating New Markets or why being a pioneer isn't always an advantage

People fail despite having the first-mover’s advantage:

If this advantage really is this special, then why do people and their businesses fail despite being new and having the essence of being revolutionary? The answer is timing!

Bill Gross, creator of Idealab which has founded over 100 different companies in the last 20 years, said in his Tedtalk that the most important success factor for any business is its timing. You can have a great new idea and call dibs on the first-mover’s advantage, but if it is too early for the market and the public isn’t ready, then you lose your advantage there and then.

The good news for others is that the advantage doesn’t expire, but it just lingers in the imaginative space of the business world, vacated and up for grabs as soon as the market is ready for that idea to explode. Unfortunately, that is not just rare, but extremely hard to do so; possible but not probable!

Creating New Markets or why being a pioneer isn't always an advantage

How do I stand out without having the first-mover’s advantage?

As mentioned above, being the first-mover is extremely rare, so in today’s article, we will be narrating the example of Southwest Airline and its success story to show you how you can use an already-popular idea and create a new market out of it. Being the pioneer of your new market, you will have the first-mover’s advantage despite not being the first-mover at all.

Southwest Airlines was founded by Rollin King, a San Antonio businessman who was, at the time, had just gone through an extremely messy divorce. During this time frame, King was driven by the idea of bringing a Pacific Southwest type airline, an airline which worked in California, to Texas. His idea was that this airline would conduct short-haul flights between Houston, San Antonio and Dallas.

King was a numbers guy. He was smart and had an even smarter idea, but as a person he was much despised due to an awkward aura and character. He needed someone else to be a part of this dream that he had. Someone who could help him with the technicalities involved in this business and so he turned to the only man that he trusted at that point- his divorce lawyer, Herb Kelleher.

Kelleher was the exact opposite of King. He was social, happy, gregarious and overall a very likeable person. At first, he perceived King’s idea to be absolutely absurd. There already were airlines which had cashed in with their huge amounts of money to get the first-mover’s advantage. There was no place in the market for a new airline to squeeze itself in.

But after hearing King for another couple of hours as to how they were going to make their airline the business hit that it would soon be, Kelleher decided to side with King in this matter and so they both set off to pick an old and used idea and morph it into something great.

Southwest Airlines, as they named it, was not a pioneer in the industry. Even its name was copied from the Pacific Southwest airlines that conducted short-haul flights in California. But at the time, only 15% of America’s population traveled by air. This type of commute was considered elite till the extent that people actually wore ties on planes.

Creating space for Southwest Airlines in this market was the next thing to impossible. But King and Kelleher never planned on striking to this 15%. Their target audience was rest of the 85% that did not use air commute and neither did they have the money to do so. Their business model did not consist of the best ideas and practices that other airlines were already doing, but consisted of being cheap, easy, accessible and fun.

They attracted the other 85% towards air commute. When asked about who their competition was, Southwest Airlines officials would answer:

“The bus and the car.”

Creating New Markets or why being a pioneer isn't always an advantage


They were never in it to compete with the existing companies and their consumers, they were in it to create new consumers and hence a completely fresh market; a market which was owned by them. They were the pioneers of this new market that they harbored and other companies soon followed.

It was not that they had stumbled upon a new idea, as I said, that happens once in a blue moon. But they were smart enough to mold an existing idea into something new. Something more appealing to a higher percentage of people.

They had to create an airline that was simple and cheap. At that time, the airfare for other companies varied highly with the time at which you bought your ticket. The lay-man runs from things that confuse and befuddle him. So, Southwest Airlines made it easy for their consumers. There were only 2 types and rates of tickets; weekends/nights and days.

They did not strive for providing the most elite services, but worked on making the air commute service accessible to all. They would tagline their advertisements with:

“You are free now to move about your own country.”

Creating New Markets or why being a pioneer isn't always an advantage

And this vision was the reason of their success. It wasn’t just a tagline, but a theory in itself. A revolution despite being an ordinary idea. First-movers despite not being the first-movers.

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