When being first matters (and when it doesn't)

technology can often seem like tech companies racing to become the first to do something at this point really anything the example that sparked the idea for this video in my head was a Chinese company called vivo who was the first company to put a fingerprint sensor into the actual screen of their phones they beat both Apple and Samsung to this and turay congratulations vivo but this got me thinking does it really matter that they were the first when does being the first matter and when doesn't it and when is it actually a bad thing I'm Martin from tech out are you watching the 28 episode of the story behind series and let's untangle that [Music] when companies tell you that they were the first to do something they nearly always mean it as a positive they expect you to be amazed by their heroic achievements and daring innovation what they don't tell you though is that being first isn't always a positive far from it it's actually a careful balancing act and the results can be either positive or negative or more often than not just me so on the positive side of things being first really has three significant benefits first is exposure the media the enthusiasts of the industry everyone will talk about your brand take Viva for example unless you live in one of these countries chances are that you have never heard of the company before and you probably have no way of buying anything the company produces either and yet they were featured on every single tech website podcast and YouTube channel all over the world including of course mine as well because they did something first that's great publicity for a brand like VEVO second is what I will call a temporary monopoly until the competition arrives whoever came first will have a hundred percent share of a market that can sometimes mean a lot of money just ask pharmaceutical companies whose whole business is being first to pet into drugs and then milking their temporary monopolies for decades to come and third we have something called the network effect which can best be explained using the example of social media networks like Facebook the more people sign up to use it the more valuable the surface will become for everyone and the harder it will be for others to start a competing service tadam then look effect this is a really good reason for especially many tech companies to launch as early as possible three clear potential benefits then but the other side of the scale exists too specifically being first is usually super expensive in two main ways if a company's first it has probably spent a ton of money prioritizing their new feature or product to bring it to market before everyone else and if the technology is truly revolutionary like 360 cameras VR or crypto currencies then they better get ready to spend another mountain of money educating customers about it before people really start using it so these costs can be considerable and yet they come at the expense of other advancements in the case of a special fingerprint reader for example VEVO could have spent the money on improving existing features instead like camera quality battery life and so on so that hot new thing better be worth it otherwise it actually does more harm than good and therefore when companies proudly proclaim that they were the first to do something we have to consider what the trade-offs that they made were actually worth making or not because we know they made trade-offs now as I was going through examples for the second half of this video I realized that they need Lee fall into two categories are called the first one platforms and the second one technologies for platforms being first to market doesn't matter at all being first to build the network though matters a lot think of voice assistance Siri Google now and Cortana all came out very early they existed on our phones for years they were probably very costly to develop and Apple Google and Microsoft spent a lot of money educating the market on how to talk to a machine as well even so when Amazon came to market with Alexa years later they could still become a dominant player in the voice assistant market because the others didn't have a strong Network yet Siri and the others were isolated things that lived on our phones that occasionally talked to third-party services Amazon replicated that quite easily but unlike the others it didn't stop there it came out with a new form factor the home speaker and it pushed for integrations right from the start the whole point of Alexa was that you could stream music from Spotify order a pizza from dominos or control your philips hue light pops from it Alexa is a platform and it is useful of its skills just like iOS and Android are useful platforms because of all the third-party apps that run on them and now within their own niche the home speaker market they are the platform to beat Google was quick enough to pivot and might catch up with them at some point but anyone else will have a hard time closing the gap we're still far away from the claim winners and a voice assistant market but if the app gap killed Windows Phone and other phone platforms then the skill gap might do the same with competitors in the voice assistant market to remember the winning platform is not the one that launches first but the one that builds a strong network first and there are lots of other platform examples like that - augmented reality comes to my mind for example Microsoft and Google both launched a our platforms early on but neither gained much traction Apple launched theirs it quickly became very popular due to being accessible on every modern iPhone and because of that it became the platform to beat with lots of third-party development behind it and the list goes on platforms live or die by the network effect as for the other category which I called technologies the network effect doesn't really apply instead it is defense ability that matters if there's any company can have a temporary monopoly if there isn't they can't so if we think about vivos fingerprint reader for example this is a typical technology with no network effect and defensibility is basically non-existent either as far as I can tell the technology has two components sensor itself which is made by a company called synaptics and an AMOLED screen which is made by samsung both of these sound like standard components that in a few months any device maker could buy so you can be sure that in a few months from now everyone will have either the same sensor or one from a competitor in their devices a year from now the question customers will ask is not who was the first company with an N screen fingerprint reader no they will simply ask who has the best in screen fingerprint reader right now so there's no significant window for a temporary monopoly and no network effect in other words being first was the great PR but not much else if that was worth the extra money vivo spent on getting it out of the door first then probably they made to my choice if it wasn't though and they didn't and just so we end this on a positive note being first to us unlike a big win for synaptics the company who made the sensor self right now there's no news of anyone else having this piece of technology figured out just yet so until that happens they not only get a bunch of good PR but they also get a temporary monopoly and they can charge as much as they want for these components that's defensibility right there and now I'd like to hear what you have to say about this topic I've put together a poll on Twitter which you can find in the description of this video so go there and cast your vote while you're at it be sure to follow me on my social media channels I'm check out our on all of them and I post a ton of cool behind-the-scenes sort of stuff over there if you want to see more from the story behind series then be sure to subscribe for future episodes and to watch previous episodes they all still relevant so binge watch them all right I'll see you in the next one bye

Channel: TechAltar

Views: 203,844

Rating: 4.9257774 out of 5

Keywords: first, 1st, Vivo, fingerprint, Alexa, Cortana, Siri, Google Assistant, Echo, market, monopoly, business, strategy, launch, early, temporary monopoly, network effect, publicity, exposure, Marton, The Story Behind

Id: HQPI4jtq65w

Length: 7min 32sec (452 seconds)

Published: Sun Feb 04 2018