Why Some Leaders Trip At The Finish Line

First Come, First Serve Markets

Pioneering a new market as the first mover can propel companies to incredible success. But without maintaining an aggressive and innovative spirit, early leaders will quickly squander their advantage once hungry competitors arrive. This post explores how retaining your startup hustle is essential, even after gaining first mover status. We examine case studies of dominant brands that got complacent and resistant to change, allowing their kingdoms to be disrupted by more nimble attackers. The key takeaway is that lasting industry dominance requires eternal vigilance, regular self-disruption, and avoiding the trappings of success.

Blockbuster’s Downfall

Blockbuster Video established an immense first mover advantage when it pioneered the video rental market in the 1980’s and rapidly expanded to over 9,000 stores. However, Blockbuster then grew inflexible and resistant to the changing home entertainment landscape. Complacency allowed Netflix to step in and claim the digital streaming market first.

Wayne Huizenga, co-founder of Blockbuster, openly mocked Netflix’s new mail-order DVD subscription model. This arrogance let Netflix build its brand recognition uncontested. Blockbuster also passed on the chance to acquire Netflix for just $50 million due to stubbornness. By the time Blockbuster tried launching its own mail service to catch up, it was too late.

Blockbuster also completely missed the next major industry leap to video on-demand streaming. The company lacked the foresight and agility within its bureaucratic culture to adapt its brick-and-mortar model in time. Meanwhile, Netflix leaned aggressively into streaming early on, sacrificing short term DVD profits to dominate the future.

The once-unstoppable Blockbuster ended up filing for bankruptcy in 2010, closing all stores, while Netflix grew into a $100 billion leader. Blockbuster serves as a stark warning of first movers becoming insensitive to disruption once dominant. Instead of trying to protect its legacy business at all costs, Blockbuster should have maintained a startup mentality of constant evolution.

“Innovate or die.” — Steve Jobs

Apple’s Ethos

In contrast to Blockbuster, Apple offers a model for how first movers can stay nimble through continuous self-disruption. Despite revolutionizing music with the iPod and iTunes, Apple refused to cling to its successful formula. Instead, it repeatedly reinvented itself, destroying its own cash cows in the process.

Apple unveiled the iPhone, making the iPod obsolete. It also introduced the iPad which disrupted its booming Mac computer sales. As Apple’s Tim Cook explained, “We’re the most significant disruptor in the industry, and we’re very proud of that. We want to keep disrupting.” This insurgent mindset has allowed Apple to pioneer markets from desktops to smartphones despite being decades old.

Compare Apple’s approach to Microsoft, which grew overly protective of Windows and Office. Missing key trends like search and social media, hungry startups like Google and Facebook disrupted segments Microsoft overlooked. However, Microsoft is revitalizing its “challenger mindset” under CEO Satya Nadella, powering new initiatives like its Azure cloud platform.

While Microsoft worried about protecting legacy tech, Apple embraces a constant startup ethos of evolution. First movers must be unafraid of radical reinvention to stay atop rapidly changing industries.

Bezos Mandates Constant Hustle

Amazon exemplifies the aggression and innovation mandated of first movers defending leadership. Despite pioneering e-commerce and controlling massive market share, Amazon stays scrappy under founder Jeff Bezos.

Bezos instilled the “Day 1” mentality at Amazon, acting as a perpetual startup. As he told shareholders: “To keep the energy and dynamism of Day 1, you have to constantly remind yourself to resist proxies, embrace criticism, and take action.”

This hunger drives Amazon into diverse new markets like cloud computing, streaming entertainment, AI devices, and physical retail. Initiatives like acquiring Whole Foods demonstrate Amazon’s penchant for bold experiments and rapid expansion rather than protecting existing profits.

Amazon also maintains an intentionally decentralized structure. Small autonomous teams are empowered to rapidly test new ideas. The most promising can be doubled down on quickly.

Rather than hunkering down, Bezos mandates leaning aggressively into the future. First movers must adopt Amazon’s sense of urgency and innovative spirit to stay ahead of inevitable disruption.

Innovation isn’t a fad — it’s the real deal, the only deal. Our future no less than our past depends on innovation.” — Gary Hamel

Conclusion

In closing, the demise of Blockbuster and rebirth of Microsoft illustrate complacency destroys first mover advantage. Early wins breed bureaucracy, siloed thinking, and resistance to needed change. But by retaining startup hustle, embracing calculated risks, and constantly reinventing themselves, companies can defend their hard-won positions. Follow Apple’s ethos of self-disruption before someone else does. Stay hungry, avoid complacency traps, and keep innovating like a scrappy upstart. Industry leaders must earn their position every day through relentless drive, rather than resting on past achievements. Adopting this mindset of eternal vigilance and avoiding the trappings of success helps first movers maintain their dominant edge.

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