Pioneers end up with arrows in their back. The second generation break even and the third generation make a profit.
An old business saying that captures a lot of experience.
What it means for you in starting up your company is that you should focus your efforts on existing industries with existing markets and customers.
When you are a pioneer you are trying to create the market and convince customers to try out your product.
The movies show this as exciting. The popular press shows this as what MBA graduates as hunting out new and exciting untapped markets. Let’s call it what it really is – pissing money up against the wall.
To put that more strongly, unless you have a truly innovative idea and are backed by either a rich relative or a VC fund, don’t be a pioneer.
Even in hi-tech startups some of the big names are in fact the second or third generation of a business idea.
When a customer base has been created, use your smarts to come in and do it better and grab part of the growth away from the incumbents. This is what the third generation comment above means. If you watch carefully you’ll see that many of the most successful business people have this third generation mentality.
It makes sense really, let someone else go through all the pain and then come in and make a profit from it.
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