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Why Second Place Might Be Better than First

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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.

Similarly Google grew steadily for several years behind Microsoft and Yahoo! until they reached today’s popularity with their trademark search engine technology and a wide array of user-friendly programs, applications, and services, currently taking over several markets while running over a million servers worldwide.

In business there is the inevitable hunt to usurp the leader, and pressure to stay ahead of the competition. That’s why I think competitive sports, particularly endurance sports, make such good analogies. They teach us about human nature and competition in a very basic way, and the lesson is something we can all experience and see played out.

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About Birgit Nazarian

  • http://vanessayrogers.blogspot.com/ Vanessa

    What an interesting concept. I would have never thought of that, and yet it seems so sensible. Thanks for sharing.

  • Vegard

    I just hope that google will not behave like a god of the internet, who can rise someone with a glance to the heavens, or destroy to the ground. Last algorithm update under the pseudonym “panda” hurt many peoples rankings. In the name of the struggle for better search results the good sites have been degraded, even those which for years were on high positions. If it goes further like that I will start to use Bing or Yahoo instead because it really starts to waver.