Posted by: DrAlanRae | March 12, 2009

Second Place really is First Loser

One of the cardinal rules of the achiever’s way of doing business is that second place is first loser. The more relaxed of us tend to think that it doesn’t matter that much – there’s plenty of business to go round.

Those of us who are sad enough to study such things discover that the law that describes this is called Zipf’s law and is an example of what happens in non scalable networks.

Basically it says that the market leader has twice the share of the second player, 3 times that of the third player, 4 times that of the fourth and so on. Still doesn’t sound too bad does it.

Let’s look at some figures from Ecademy. Here is the size of the networks of the top 4 players in the UK on Ecademy

1) Thomas Power 44253 connections

2) Jim Tuffin 23078 connections

3) William Buist 16866 connections

4) James Knight 11686 connections.

So stack me – the theory is confirmed by publicly available data.

However, you might think that this is all very well but perhaps we should focus on the quality of a few connections. And for many, local non-scalable businesses that’s probably fine. However we still don’t appreciate what we’re missing.

So let’s see what it actually looks like – thanks to the wonders of Excel’s surface modeller.

clip_image002

Did I hear cries of Arrrrrrrrrgh?

 

Scary isn’t it? Second place really IS first loser. If that’s not a Gorilla, 2 chimps and a load of monkeys I’ve never read Geoffrey Moore.

 

What do you chaps think? Which side of the networking fence do YOU sit on?

Quality or Quantity – or may be quality via quantity

 

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Responses

  1. @ “Quality or Quantity – or may be quality via quantity”

    My view is that the 2 are not incompatible although there is confusion.

    If you start from the premise that networking is about building relationships where you get to know, like & trust people then over time you will develop a number of quality relationships. You have a finite resource of time and mental capacity so the nember of these relationships will be limited (google Dunbars Number). These ‘trusted relationships’ will help spread your reputation far and wide. You will not get to like or trust everyone you meet so you need to meet a larger number of people in order to develop these ‘quality’ relationships.

    Social Networking platforms do 2 things. They provide a feed of new connections into your offline world and help you to keep in touch with those in your offline network. A large online network as you illustrate above is not therefore IMHO incompatible with building a quality network.

    • I think you’re absolutely right Dave

      The current research project we’ve been doing with BNI suggests that everyone needs a core networking group to support them and refer them.

      In addition some people – those with scalable business models need to build and sustain a much larger network of contacts as a feed for their core group but also to allow for those chance encounters which can be so valuable for expanding your range of possibilities

  2. Hey Nice blog here I’m adding it to my rss feeder, hope you update often!

  3. Hello!
    Very Interesting post! Thank you for such interesting resource!
    PS: Sorry for my bad english, I’v just started to learn this language 😉
    See you!
    Your, Raiul Baztepo

  4. Hello !! 😉
    My name is Piter Kokoniz. Just want to tell, that I’v found your blog very interesting
    And want to ask you: is this blog your hobby?
    Sorry for my bad english:)
    Tnx!
    Your Piter Kokoniz, from Latvia

  5. This is very up-to-date information. I think I’ll share it on Delicious.


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