03.29.2019

The Second Mover Advantage in the Sharing Economy

by Kyle Celeste

In the age of ride sharing and the monetization of human networks, we have seen many brilliant ideas emerge. Uber created a revolution in the transportation industry by taking power away from traditional taxi companies and giving it to the consumer. Yet, almost 10 years after Uber turned the world upside down with its idea, today we saw its main competitor, Lyft, be the first to go public. While Uber captured the market early on, the years that followed were marred with lawsuits, HR disasters and government regulations rapidly draining Uber’s coffers. Lyft on the other hand, was able to sit back and watch, slowly stealing away drivers and customers, and safely navigating regulatory issues after Uber broke the bank to resolve them.

When to Press Your Advantage

Now, Lyft hasn’t emerged from the decade completely unscathed; many of the lawsuits and regulations in which Uber has been embroiled pertain to Lyft’s services as well. The difference is that Lyft’s marketing team has done a brilliant job of separating themselves from the corporate giant Uber and the associated bad press. Lyft knew when to press their advantage and when not to. At times litigation was unavoidable, but to refrain from spreading resources too thin in lieu of courtroom costs, Lyft made sure that there was a constant flow of positive news stories being pushed. The result has been a case study in public perception, which can be easier to mold as a second mover in a new industry. Even moving towards their IPO filing we saw Lyft making headlines promoting National Women’s Month and supporting those affected with  debilitating mental illnesses. Marketers and PR agencies can strategically shy away from the spotlight initially, and emerge as an industry darling once the product has been perfected and the competitors have fallen out of favor.

Promoting the Mission

The goal for marketers then, may be to let the industry mature a bit before making a big move. Regardless of the strategy, companies will almost always be at a disadvantage as a second mover when it comes to initial market share. Instead of focusing efforts on fighting a competitor for customers, it often makes more sense to focus on building the brand, and establishing momentum with a strong media presence. This has a number of advantages. For example, promoting your founding story and growth culture starts to raise awareness for your brand, while also making it more relatable and accessible than the 1st mover giant. Through 2015-2017 Lyft’s marketing strategy revolved around it’s culture and we saw an influx of articles from the Lyft CEO and even Ex-Uber users highlighting the benefits of Lyft’s soon-to-be famous culture. Another opportunity: offering thought leadership to showcase your knowledge of the industry, whether it’s a solution to a problem or a prediction for growth or change. This allows you to insert yourself into the dialogue the 1st mover is already creating in the news, without attacking your competitor outright.

Meeting Your Goals

We had the chance to implement some of these strategies with Rize, an app that aims to help the modern worker save money. Rize was considered a second mover within the financial tech space where companies like Digit and Acorns had already established themselves, especially in the millennial market. Our campaign for Rize was centered around promoting the founder’s mission: to make it easy to save, regardless of financial literacy. Acorns’ marketing strategy focused on the technological benefits, particularly how the app automatically moved spare change from checking to savings accounts. While Acorns had built a loyal consumer base, we felt that Rize could establish themselves as a company on a mission to help people realize their dreams. We allowed the more established competitors to start the dialogue and instead focused on ways to let Rize continue the conversation. We aimed to position Rize as a resource for its customers; instead of harping on technological advantages we offered up Rize thought leaders as experts in the financial space gaining customer trust. We were successful in securing a Forbes article that accomplished two of our goals heading into the project; showing that Rize’s primary mission was to let people reach their personal savings goals and getting mentioned in the same piece as some of their top, established competitors.

Timing your message with industry conditions

Budding industries that are focused on new technology or a new implementation of an old technology are generally where second movers can thrive. When a competitor starts to get caught up in some of the negatives (Litigation, PR mishaps) associated with being a trailblazer, it might be a good time to ramp up marketing efforts with your second mover client. If you’re able to time the correct marketing message with the perfect industry conditions, the impact might just propel your second mover into a market leading role!