Who shouts in celebration, “We’re Number Two!” when the yearly market survey results come out for their industry? Maybe it sounds odd to be happy settling for a notch or two down from the top, but consider that in competition, the front-runner is always the one being chased down, copied, dogged, and under pressure to stay ahead. The leader spends more resources and energy on maintaining that top position than on learning from the competition. The competition, on the other hand, follows closely behind at a more leisurely pace, making careful strategy decisions and possibly wiser decisions for long-term success in the market.
An analogy near and dear to me is the marathon. For most of the 26.2 miles, top elite athletes seem to run together as a pack; no one, I mean no one wants to appear to take the lead early, as it gives an advantage to those who run just at their heels.
Anyone bold enough to attempt taking the lead sets the pace and allows their competitors to draft behind them, watchful for an opportunity, a sign of weakness before they take over the lead. Staying in front of the pack is so stressful, there is often a breaking point at which the leader lets up, unable to maintain that grueling pace for so many miles, allowing the next runner or couple of runners to emerge with a burst of confidence and surge ahead. The former leader suffers a demoralizing blow, difficult to recover from. Because it takes almost superhuman stamina and guts to stay in front for the entire race, taking the lead early nearly always sets one up to fall behind.
Consider the classic example of Apple vs. Microsoft in the personal computer market. For a very long time Apple appeared to be in the number two spot behind Microsoft, but was content to carve out niche markets in education, graphic arts, and advertising while Microsoft grew, took on new competitors, and became the target of viruses and complaints. Now with Apple’s many products like the iPhone, iPod, and iPad, the company has surpassed former rival Microsoft in total market value.