Innovators, Imitators, and Idiots

I read a recent post somewhere detailing that every product, service, and technology goes through 3 stages of release.

First, the innovators create the offering. They work out the initial kinks and get the base functionality down. Think of the innovators as building the first house. The first house has shelter, a bathroom, and walls. It works for what it is supposed to be.

Next, imitators come along and “steal” the core function of the offering. Along the way they add things that make their offering more appealing then what was given by the innovators. They add paint and windows and cable TV to the house.

Finally, the idiots try to jump on the bandwagon. They offer the same house the imitators created but try a variety of tricks to gain market share. Sub-prime loans, “free” upgrades, etc.

Here are some examples:
Innovator: Prodigy and AOL
Imitators: MySpace, Facebook, Freindster
Idiots: Ning

Innovator: HP, IBM, Texas Instruments
Imitators: Dell, HP (again), Apple
Idiots: Whitebox computer suppliers trying to compete on price alone

Innovator: Amazon
Imitators: Zappos, Overstock, Buy
Idiots: Yahoo Storefronts

Innovator: Alta Vista, Yahoo
Imitator: Google, Bing, Yahoo
Idiots: Dogpile, Powerset

Being an innovator is cool, being an imitator can mean big $$$, being an idiot means your offerings have a limited time (if any time at all) to make some cash before the next idiot comes along. And if another innovator enters the sector, it’s all over.