The Fast Follow
This post describes a fast follow startup and the implication for how that startup learns.
A startup is a market hypothesis looking for validation. It’s an organization in search of a business. If they’ve accepted funding, then it’s a group of people looking for a liquidity event.
Follow means imitation. It means that an entrepreneur or a herd entrepreneurs have been observed pursuing a particular product-solution-market fit, or a hypothesis, and some founder wants to join the herd.
Fast means that the organization is imitating fast enough to nip at the heals of the lead innovator. It is imitating fast enough to be contention of overtaking the leader, or close enough to experience a liquidity event.
When the founders resolved to do a fast follow, they found themselves on day 0 with a price point already set, a reference set of competitors, and the edges of the market, problem, and solution already defined (Horowitz, 2016).
The founder is really buying certainty when they buy into a fast follow.
They’re certain that there is money, a market, and a price, that there are some customers who know they have a problem, who are willing to buy, and that there is some drama-based publicity to be mined. They’re certain that there are multiple VC’s who are looking for an answer to that thing in their portfolio. They’re certain that there’s something there.
They’re also buying into the idea that the tough learning is already done by the leaders in the set. If the competitor has a feature built in, then chances are all the R&D has been done, so then it’s just a matter of imitating what has already been learned by another. And this is cheaper than discovering it for yourself.
How they learn
Everybody learns by imitation. You learned how to speak through imitation. Chances are very good that you learned about a lot of things you buy because of imitation. There simply isn’t enough time in your life to independently design everything that you think and do.
A Fast Follow startup learns primarily through imitation. The decision to compete in the same market is an admission of imitation. They learn through the analysis of external factors what the competitors are building, what prospective customers think, and what present reference customers are saying. They learn about what’s working with the competitors and what isn’t. They may come across sales playbooks. They’ll plot their own performance against the fair value line to understand their positioning.
A Fast Follow startup may also learn from internal data. A given feature observed in the competition may be replicated in a way that better addresses the job to be done. For example, let’s say that the leading firm has a gallery feature because florists want to highlight a series of dishes to their customers on their website. The imitating firm may understand that the florist wants to show swagger but also wants to sell some, but not all, of those arrangements. The imitating firm may build a gallery feature, but also add a buy activation in-situ. If the imitating firm is able to learn about specific features faster than the leading firm, then the imitating firm may stop following and start overtaking.
If you work at a fast follow, understand that they’re trying to mitigate the risk and they’re trying to overtake. Don’t get mad at them for always tail-lighting the leaders. Don’t get mad at them for excusing imitation as adopting ‘best practices’. Sometimes they aren’t even aware that they’re imitating. That’s all just dressing.
That’s just how they learn.