For many businesses, first-mover advantage is everything. Entry barriers come in many shapes and sizes but few work better, or for longer, than simply being first. Market access and penetration, customer loyalty, brand awareness and employees with unique skills can be among the benefits of being first. Of course, there are examples where this doesn’t seem to hold, where copying someone else’s business model – competition – results in their obliteration or, at least, in a significant erosion of their monopoly power. But pole position is usually the best place to be.
Being first involves vision and risk. Indeed, visionaries are often big risk takers. And, consequently, regularly come unstuck. When things go wrong, it can be hard to discriminate between chancers and true visionaries who were just unlucky. It has been said that a key aspect of Irish corporate life is that we never bother to try to make this distinction: you get one shot at success and you are out of the game, permanently, if you fail. This is our culture and, until recently, one that has been hard coded into our bankruptcy laws. Even with the changes that we have made to those laws, it will be a long time before we truly understand the difference between recklessness and risk.
This week we were told we need to copy the development experience of London's Canary Wharf: Dublin's docklands should emulate, apparently, successful regeneration schemes in London. I wonder if the originators of this latest wheeze are aware that one part of Dublin's south quays is already nicknamed Canary Dwarf.
Looking at other business models is always a sensible thing to do. Sometimes, however, the only successful copiers are counterfeiters: to argue that we need to be “another Canary Wharf”, displays both poverty of imagination and a lack of understanding of the businesses that are based in London’s docklands.
Canary Wharf wasn’t always the success story that it is today: being first did give it many advantages but didn’t prevent the original visionaries behind the project from going bust. But that first-mover advantage ultimately enabled London to consolidate itself, via the expansion into the docks, as Europe’s unrivalled financial centre.
Dominant characters
Rather than asking what can we do the same as everybody else, surely it would be better to investigate how we can be different? That’s where the vision thing comes in – as well as the risk. Olympia & York, the original property developers behind Canary Wharf, took a huge gamble back in the 1980s that London’s financial sector would, on the back of impending deregulation, expand massively and would outgrow its then only base, the
City of London
. As with many property development firms, the owners of Olympia & York, the Reichman family, were strong and dominant characters.
In its early incarnation, Canary Wharf was a joke and a place of dread if you were relocated there. It was hard to get to and dead after dark. Sluggish take-up of office space plus the usual vagaries of the business cycle combined to bankrupt the Reichmans. Many things happened next, including the building of a proper transport infrastructure between Canary Wharf and the rest of London. The early 1990s recession came to an end. The Reichmans made a comeback and ended up owning, again, a good chunk of Canary Wharf – other countries do redemption better than us. Canary Wharf is booming.
There are lots of parallels and ironies in all of this. If we have anybody to rival the story of the Reichmans it is surely to be found in the role Harry Crosbie has played in the redevelopment of Dublin's docks. I don't know if he ever sought to merely copy what anyone else did but I doubt it. Crosbie is in dispute with Nama. I wonder how many of us hope that he bounces back as successfully as Paul Reichman did.
Visionaries and risk takers are needed for things like the regeneration of our cities, not committees who lazily seek to just clone apparent success stories elsewhere, displaying total ignorance of the complex and chequered history of today’s successful cities and economies. But I guess we find success as abhorrent as failure, rather than recognising the often thin line that divides them.
