First mover

Many years ago I worked with a lovely guy. Affable. Personable. Everybody loved him. There was only one problem: he was utterly incompetent.

We were plying our trade in an emerging specialist niche. A lucrative case of being in the right place at the right time, as the forces of supply and demand temporarily tilted heavily in our favour.

The affable guy spotted a gap in the market. In most technical fields there exists a canonical text. One book that sets out the core principles and approaches that is widely accepted and regularly referred to.

Benjamin Graham is required reading for stock market dabblers. Computer programmers learn their design patterns from Martin Fowler. For many economists, it all starts with the works of Adam Smith.

In this niche however, nobody had written that book. Yet.

The affable guy decided to fill that gap himself. He put his head down and churned out what he hoped would become the book on the subject.

It was short. More like a pamphlet that a traditional technical text.

It was light and fluffy. A meandering narrative with little in the way of substance.

It ably demonstrated the author’s lack of mastery in his chosen field. Drawing invalid conclusions. Error-ridden. Ignorant of core tenets. Misunderstanding the fundamentals.

The affable guy opted to go down the self-publishing route. Chose a price seemingly at random. Penned an Amazon listing laden with buzzwords, hyperbole, and SEO keywords. Then waited.

Too cheap to hire an editor.

Too impatient to have his manuscript proofread.

Too inexperienced to be familiar with best practices for formatting, graphic design, layout, and typesetting.

Yet in the absence of any other books on the topic, it sold a couple of dozen copies.

The return on investment for the time he invested in writing the manuscript was terrible. Mere pennies per hour.

For a time, there was some debate amongst those working in the niche about whether the book was intended as satire or was just seriously flawed. Those who understood the subject matter were horrified and scathing.

Then a funny thing happened.

Technology columns in the mainstream media suddenly caught wind of this emerging niche. They shone a spotlight on the next cool new thing. A shiny toy that suddenly every megacorp absolutely had to have in their IT department, or risk being perceived as a dinosaur and left behind by their more agile and innovative competitors.

A bandwagon to jump on.

An emergent fashionable fad.

A fleeting trend laden with hype and buzzwords, that all the cool kids felt compelled to be part of.

As the only author who had bothered putting pen to paper about the niche, the affable guy found himself in high demand.

Media interview requests.

Keynote speeches at industry events.

The affable guy swiftly found himself becoming a talking head. The “go to” guy on the topic. Sought out by C-suite execs who desired private briefings on this new fangled technology that they had never heard of before.

Entrepreneurs sensed the beginnings of a gold rush.

Consultants and freelancers by the hundreds hoped to leap aboard a gravy train, snapping up copies of the book so they could sound knowledgeable in job interviews.

Interviewers did likewise, desperate to glean enough vocabulary to ask sensible sounding questions, and perhaps understand a little of what the candidates might respond with.

Permanent staff expensed copies of the book as part of their continuous professional development.

The affable guy’s ego inflated as his industry profile grew and the niche’s hype cycle accelerated.

Yet he experienced a gnawing feeling of doubt. Deep down, he knew that his book had not been very good. It did not contain all of the answers. It did not even do a good job articulating the problems!

Having worked with a team using the technology for a while now, he also realised it was a technical dead end. Incapable of performing the miraculous feats that the evangelists and entrepreneurs widely proclaimed. Soon to fade into the background, reverting back to a specialist niche solving a very narrow class of specific problems that few industries faced.   

Those colleagues whom he had relied upon to keep him propped up and make things work were becoming resentful of his rising profile and rockstar status within the client organisation.

They knew the truth. He was a charming frontman. Politician. Showman.

To the guy’s credit, he understood that the ride wouldn’t last long. He set up a side business hosting residential professional development courses. A little technology. A lot of sales. Some strategy, life coaching, and career development advice.

Then he used his newfound “personal brand” to promote the new business venture at his public appearances.

Pretty soon he was hosting regular residential retreats at a boutique hotel in the countryside. A dozen or so starry-eyed permanent megacorp employees would venture out to be entertained by anecdotes and regaled with war stories.

Upon returning to their workplaces, the attendees would reflect upon an enjoyable week spent out of the office. Yet they were unable to remember a single tangible thing or actionable insight they had taken from the course.

One of our colleagues was determined to set the record straight. He invested six long months of nights and weekends hammering out the manuscript of what the definitive book should have been.

It was long. Detailed. A weighty tome articulated in precise academic prose. Covering the history, background, context, theory, methods, and practical application of the niche we were working within.

It was not self-published, but instead followed the traditional route of being picked up by a recognised and respected technical publication house. Edited. Fact checked. Proofread. Professionally laid out.

But it didn’t sell.

Best seller

Recently, the three of us caught up for a drink and to discuss a potential new project.

The affable guy was now a department head at a Fortune Global 100 megacorp. Six figure salary. Controlling a budget that made “enterprise” salespeople go weak at the knees. A self-proclaimed “thought leader” who still occasionally gave keynote speeches and “influencer” presentations. Job hopping every 12-18 months, jumping ship each time an employer started to realise there really was no substance beneath all that style.

Our conscientious former colleague was now grudgingly working for the affable guy. A mid-life crisis induced career pivot into a short-lived hospitality venture had left him richer in life experience and financially ruined. He gave a spectacular rant about the folly of “do what you love” career advice.

Just for sport, I asked them both how their total book sales had compared, now that the world had moved on from that brief moment when our former technical niche had been in high demand?

The light and fluffy pamphlet had sold thousands of copies. Despite all its failings, it was still selling a copy every few days, continuing to drum up attendees for the lucrative residential retreats.

The weighty tome had sold just a couple of hundred copies in total, having failed to break into the sales charts for our broader technical domain. A superior product in almost every way, it had been late to market. A terminal failing from which it would never recover.

Not easily deterred, my conscientious former colleague had subsequently gone on to publish half a dozen more non-fiction books. Some of which remain near to the top of their respective category’s bestseller lists to this day.

As had been the case with the affable guy, his return on investment for the time he invested authoring was laughably poor.

Yet he enjoyed the process.

The small amount of recognition it had brought from his industry peers.

Most of all he loved that he could take his children into the huge Waterstones bookstore in London’s West End, point to books that displaying his name on their spine, and proclaim “I did that!”.

First mover advantage

The contrasting experiences of my former colleagues made me think of an old high school economics lesson, that of “first mover advantage”. The theory was that victory goes to only the very fast or the very good.

In the beginning, it is possible to capture a large market share early on with a substandard product, because there is little competition. The approach adopted by my affable former colleague. A model favoured by venture capitalists hunting unicorns in the wilds of Silicon Valley.

Once a market becomes established, market share largely becomes a zero-sum game, meaning that any gains must be taken from one of the incumbents. This usually involves some combination of a lower price, better service, and a demonstrably superior product.

Recently I’ve observed a flood of aspirational writers launching  newsletters.

All hearing the stories about large subscriber audiences acquired by first movers.

Many dreaming of potential riches that might be generated by monetising such a following.

It reminds me of some old EarlyRetirementExtreme and Monevator posts. Back in the days when each was a relatively new writer just starting out.

Discovering their voice. Experimenting with content, form, length, and publishing cadence. Still figuring out what they were really about.

An interesting aspect of their early work was that they often wrote about the challenges of writing a blog. Attracting an audience, then retaining them. Generating income. Learning the hard way about what matters and what does not.

Their challenge to be noticed. Then to become known.

Operating within a crowded niche that was already saturated with content.

Dominated not by better or more talented writers, but by those who simply got there first. In many cases, the same usual suspects who still dominate rankings and search results in those niches today.

These were interesting meta pieces, writing about writing as opposed to writing about “on topic” subjects relevant to their chosen niche. Something they could get away with back then, as relatively unknown bloggers who were largely writing to a small audience of other relatively unknown bloggers.

It will be interesting to watch how this new generation of writers, publishing on a newly emerging medium, will evolve and perform. Blogging by another name, only the audience interaction takes place on social media rather than in the comments.

Already the newsletter marketplace is becoming crowded and shouty. As was the case with blogging a generation earlier, the barrier to entry is low and the difficulty attracting an audience remains high.

Like blogging and podcasting, I suspect most newsletters will be short-lived experiments. Started with a burst of enthusiasm. Then swiftly abandoned when the promise of fame and fortune fails to materialise.

Hopefully, some talented new writers do emerge from the cacophony. Adding value. Offering fresh insight. Succeeding to join the ranks of incumbents who have long serviced the audience.

The best products are rarely the first movers, but rather the superior offerings that follow once a new market is proven.

Just like my conscientious former colleague’s weighty tomes of knowledge. EarlyRetirementExtreme’s concise insights. The astute essays that begin each edition of Monevator’s long-running “Weekend Reading” newsletter. Abnormal Returns conscientious curation.

Alas, the best and the most successful are seldom the same thing. Your attention is also a zero-sum game. Invest it wisely!

References

• Fisker, J.L. (2008), ‘Some observations after 1 year of blogging’, Early Retirement Extreme
• Fortune (2020), ‘Fortune Global 500‘
• Fowler, M. (2002), ‘Patterns of Enterprise Application Architecture‘
• Gartner (2020), ‘Gartner Hype Cycle‘
• Graham, B. (1949), ‘The Intelligent Investor‘
• LaBuz, K. (2020), ‘What is Substack?‘
• Monevator (2008), ‘Why blogging for money will not make you rich‘
• Monevator (2020), ‘Weekend Reading‘
• Smith, A. (1776), ‘An Inquiry into the Nature and Causes of the Wealth of Nations‘
• Substack (2020), ‘Top Paid Publications‘
• Viskanta, T. (2020), ‘Personal finance links’, Abnormal Returns

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