![]() ![]() You’re taking on high risk but not necessarily seeing a big reward just for getting there first. With no path to follow, and no lessons to learn from others, you get to make every mistake first and pay top dollar for it.Īnd while you’re racking up those bills blazing a new trail, there’s no guarantee it will pay off in the end. You’ve got R&D, regulatory issues, and market education challenges that are all burning cash with an uncertain payoff. Whether you are establishing an entirely new market, attacking an existing market from a new angle, or just introducing a game-changing new feature, the associated costs are far larger than putting a new twist on an existing offering. How are so many companies squandering their early arrivals? A sprinkle of hubris, a dash of complacency, the burdens of a legacy, and depleted reserves. “Like early pioneers crossing the American plains, first-movers have to create their own wagon trails, but later movers can follow in the ruts,” Contently’s Shane Snow wrote in his book Smartcuts: How Hackers, Innovators, and Icons Accelerate Success. ![]() But while being a trailblazer might turn you into an icon, most early entrants end up being also-rans when the dust settles. Innovators like Henry Ford and Thomas Edison appeared at the time to have strangleholds on their industries thanks to their pioneering ways. In the landrush moments of the dot-com boom it felt like the first company to grab a killer URL was destined for a lavish IPO (, anyone?). When there’s a limited amount of resources, a first-mover can snatch them up before others come calling.Branding is much easier when you don’t have to differentiate yourself from a similar offering.Patents can box out competitors from copying some of your technology, methods, and ideas.You can capture customers that can’t stomach the switching costs once competition arrives. ![]() There are some benefits to being the first to move: He who comes later to the scene and rushes into the fight is weary.” “Generally, he who occupies the field of battle first and awaits an enemy is at ease. Wouldn’t it be easier to answer all those questions if someone else had already given it a try? The myth of first-mover advantageĮquating being first with success isn’t a new concept we can look back more than 2500 years to see Sun Tzu touting its advantages: Second, you need to understand what competitive advantages your organization has, such that it’s the right play for you.” This also means assessing how well-satisfied that population is with its ability to get that job done today. “You need to determine how big of a population prioritizes the job you’re trying to solve for. “It’s important to assess whether an opportunity offers enough potential to meet your organization’s goals, as well as whether you’re the right company to pursue it,” says Dave Farber of New Market Insights. ![]() Think about what must be in place for a company to feel confident about a major strategic decision. The graveyard is littered with former household names like Atari and Diners Club that pioneered their market before petering out. More often than not, however, the company that beats everyone to the punch doesn’t end up the long-term champion. eBay is still the go-to online auction destination with nearly 200 million buyers and sellers. #First mover advantage free#Amazon’s head start in e-commerce turned into hundreds of millions of customers, with more than 90 million of them paying an annual subscription just to get free shipping. There are definitely examples of where the first-mover advantage paid off. When your competitors eventually show up they’ll be fighting over the scraps and expending way more effort trying to steal your current customers, with varying levels of success. The common sense rationale is that if you’re the first offering in the market to boast Capability X, everyone who cares about Capability X will buy your solution. It even has its own TLA (its three-letter acronym being FMA, obviously). ![]()
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