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Avoiding The Snap Trap: How To Be First And Not Screw It Up

Snap’s Stories feature has been endlessly copied. But as the company’s disappointing quarter suggests, being first doesn’t always pay. Here’s how to be first—and stay on top.

Avoiding The Snap Trap: How To Be First And Not Screw It Up

For Snap, it’s becoming clear that being first doesn’t matter. In its first earnings call as a public company this week, it posted a staggering loss of $2.2 billion last quarter, causing some analysts to worry aloud whether copycat products were going to prevent new user growth in the long run.

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Snap has already seen its Stories feature, a genuinely innovative format when it launched in 2013, get cloned by virtually every social network from Apple to Whatsapp to Linkedin. Instagram Stories, the most successful copycat, recently surpassed 200 million daily active users, which is more than Snapchat’s entire user base of 160 million.

All founders can relate to the pressure of wanting to launch a new product or feature first. It’s a common belief that if your competitors beat you to market, they’ll get rich, and you’ll be dead. More often than not, it’s the other way around. According to research by the American Marketing Association, 47% of first movers fail compared with only 8% of fast followers.

If being first doesn’t matter then the question becomes: How can you maximize the value of a first-mover advantage?

1. Maintain your technological head start

If you’re inventing category-defining technology, like Snap does, you have a head start when it comes to expert knowledge, usage data, and customer feedback. The chart below, pulled from Snapchat’s S-1, shows Snap’s strength in shipping new ideas fast.

[Image: Sec.gov]

The downside for Snap’s fast followers is that they’ll copy the failures too because they don’t actually know what they’re doing. (Remember Snapcash? Exactly.) WhatsApp’s Status feature, a clone of Instagram stories, was a self-admitted flop. Facebook quietly released a version of Stories last month to little fanfare. Who’s next?

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Speed is tantamount in early-stage technology companies; if you’re moving fast enough, you’ll limit your followers to shipping yesterday’s ideas tomorrow.

2. Make defensive moves

Along with out-innovating your competitors, you can make defensive moves that prevent your opponents from following in your exact footsteps. There are many different things you can do, but here are a few examples:

  • Exclusive content partnerships with brands or celebrities (such as what Netflix did by securing exclusive stand-up from the likes of Dave Chappelle and Louis CK) or protecting proprietary hardware (voice changing, filters, etc.) with patents.

  • Winning patents to prevent your technology being directly copied and used in your industry, if not industry-wide. One example: Amazon’s 1-Click patent and Apple’s iPhone design patents.

  • Exclusive partnerships with core component suppliers. An example is when AT&T paid over the odds for exclusive rights to launch the iPhone.

The key is using your first-mover advantage to ensure that it’s an advantage for as long as possible–possibly long enough to win the market entirely.

3. Lock up your early adopters

By signing up early adopters (those quickest to adopt) you make it near impossible for new entrants to get a foothold. This is particularly effective in the formative stages of a new product, and can be relevant for some of the newer innovations Snap is working on. This can be achieved in two ways:

  • Bribery: Simply give away free devices or accounts to the noteworthy people, and let them spread the word.

  • Long-term contracts: If you’re confident your product is sufficiently desirable, remove mobility of customers with a nice 12- to 18-month contract.

Uber is a great example. In its earliest days, the company gave out millions of free coupons to customers and offered heavy discounts to anyone referring their friends. It even went as far as persuading its competitors’ drivers to switch with cash incentives and appealing car loans (which locked them in for up to two years).

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Why copycats won’t win

If you’re first in your market, you alone bear the cost of creating the market. You alone need to convince the world your offering is valid. Copycats have all the advantages. They can copy the best parts of your products, they don’t make your mistakes, and they can even use your product to explain their own.

But they have a weakness too. They don’t have a vision. They can copy the “what” of your product but not the “why.” I expect to see Snap and every other innovative new social channel face audacious copycat challenges over the next few years. They’ll produce a sequence of killer features that will gain widespread adoption only to end up being cloned by their competitors. First-mover advantages have a shelf life and must be replaced with long-term differentiators. That starts with a vision.


Des Traynor is cofounder and chief strategy officer at Intercom, a messaging platform for businesses to communicate with customers and leads. He’s coauthor of the new book, Intercom on Startups, an opinionated take on building a successful startup from the ground up.