How Can You Use Being First To Market A True Advantage?
I’ve been fortunate enough during my career to be involved with hundreds of product launches during my career. I’ve been first to market, second to market, and very late to a market, so I’ve seen the power of being first to market.
If you handle being first to market right, you are unstoppable.
Years ago, I was fortunate enough to be involved in one of the of the most successful firsts in the Analog IC business: The launch of the first single supply RS-232 IC ever: The MAX232:
A little bit later, our arch rival, Linear Technology announced their own version of the same product, the LT1181. Linear did really well with their version of the product, but Maxim did incredibly well building a $200M/year business with all the variations and innovations we came up with.
Why did we do so well?
We never stopped innovating.
It’s not enough to come up with a great product because your competitors will eventually surpass you. Indeed, Maxim’s success with the MAX232 eventually spawned 13 direct competitors including companies much larger than us such as Texas Instruments, National Semiconductor, and Analog Devices.
Yet we dominated the space with over 80% market share. The reason was we never stopped innovating.
We moved faster and quicker than our competitors, so our competitors were always at least one generation behind us. No matter how hard they tried, they never could catch up.
The other side of the story: It’s really difficult to catch up when you’re second.
Linear Technology turned the tables on us in the RS-485 IC market when they announced the first CMOS RS-485 IC the LTC485. The LTC485, like the MAX232 before it, shook up a commodity market where there hadn’t been any innovation in years.
Linear’s product was so much lower in power than the old bipolar products from Texas Instruments and National Semiconductor, that they built a multimillion dollar high margin business.
We quickly developed our own version of the LTC485, the MAX485, and we came up with many other great new innovative products. We did really well with our products. However, Linear remained the largest player in the segment because they were first to market.
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