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To Pioneer or Not to Pioneer, That is the Question

Know when to go 'all in', or slow your roll!

Deciding whether to make a major investment in an innovation can be complex. In my early career, I recall hearing that it’s often better to not be the pioneer and to learn from others' experiences before making a large investment. However, there are plenty of instances when being first to market has created differentiation and challenged the dominant players within a space.

So how do you decide when to pioneer? The answer is… it depends.

Factors to Consider in Support of Being a Pioneer:

  1. First Mover Advantage: Perhaps you can snap up market share from the competition and create lasting loyalty. Think Amazon Prime and Adobe Creative Cloud... and Chat GPT may soon have a place here. One may also need to consider any risks associated with waiting. What happens if you don't move forward?

  2. Reasonable Financial Stakes: If you can stomach the investment if it breaks even or fails, it may be worth it. This also means being ok with the opportunity cost of not focusing on other initiatives as well.

  3. “Springboard” Potential: There is an application that goes beyond its initial use. For example, an organization that invests in building workflow automation to increase ecommerce product speed-to-market by 50% could be adapted for internal uses to create incremental value to the organization.

  4. New Revenue Stream: A natural adjacency to the core brand or product being sold (e.g. Apple App Store, AWS). Also consider if the innovation can be repackaged and sold to affiliates and other companies. A word of caution: It could be harmful deviate too far from your core unless you are prepared to do so (e.g. Kodak’s is sometimes cited for it's move to digital images vs. sticking with film).

Factors to Consider in Support of Waiting It Out:

  1. Potential Legal Risks: New innovations that captures customer data or are subject to other regulatory factors. It's important to do all of the due diligence possible here and tap into the experts.

  2. Unclear ROI: You are not able to even directionally forecast the value of the innovation or stand by the business case. Or, you just don't have the financial backing or stomach the risk.

  3. Moment in Time: The idea is tied to a fad or an external factor without staying power (e.g. Curbside pickup was widely used during the Pandemic and has now receded in importance).

  4. Brand Risk: Unless you are sure you can deliver an exceptional customer experience true to your brand, it is recommended to not proceed.

All said, each prospective opportunity is unique and you will need to apply your own set of filters to make a decision, carefully evaluating the risk and reward. The factors here are meant to get your juices flowing with some thought-provoking angles. Good luck!

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