Startups · Entrepreneurship

Is the first mover advantage a must to succeed?

Ryan Thompson Commercial Real Estate Agent at Stidham Commercial

September 29th, 2016

Especially if we are talking about online networks that have that market share and networking effect component to succeed. What are your thoughts?

Michael Leeds CEO & Founder

September 29th, 2016

Friendster (https://en.wikipedia.org/wiki/Friendster) and MySpace came before Facebook. Facebook came before Snapchat.

Anil Jain Senior Vice President & General Manager, Media at Brightcove

September 29th, 2016

First mover advantage sounds like a competitive strength ("we were the first to do X....") but it's not always a good thing. As people sometimes point out -- "the pioneers are the ones with all the arrows in their backs." First mover advantage is great and can work as a strength if you have the ability to sustain that advantage by continuously doing what the market you're serving cares about, whether it's providing the most responsive customer service or delivering a steady stream of innovations or maintaining the best performance in your field or category. In entrepreneurial ventures, being the first to do something may garner you the spotlight -- for a moment -- but it also allows your competitors to watch you, see where you trip up and learn from your mistakes. Being a fast follower is sometimes a shrewder strategy. Put more frankly, let those who come before you flatten out the learning curve for you. First movers often help create awareness in a category (or create the category).

David M

October 1st, 2016

Ismail-Do you have the study?  What industries, types of businesses, # of companies in the study?  Stats have value when background on them is provided as well.

Tom DiClemente Management Consulting | Interim CEO/COO | Coach

September 30th, 2016

I'll pile on and agree with most of the above that there is rarely advantage in being the first mover. One of the biggest reasons that followers tend to overcome the first movers is that they learn how to market better, how to reach the right consumer with a compelling message or with the features that the consumer desires.

Shel Horowitz I help organizations thrive by building social transformation into your products, your services, and your marketing

September 30th, 2016

First-mover is an advantage IF you have the skills and infrastructure to monetize it. Sometimes, you don't even have to be second, if you are that much better. There were 20 or so major search engines when Google came along. Google is the only example I can think of where "if you build it, they will come" actually WORKED. Google spread very rapidly in the old days because friends would demonstrate it. Once you saw the clean interface and the rapid, accurate search results, you were hooked.

Arthur Lipper Chairman of British Far East Holdings Ltd.

September 29th, 2016

No. Frequently it is the second mouse which gets the cheese.

Jason Taylor Executive Director at Total-Apps Inc.

September 29th, 2016

No look at companies like Apple and 3m they just make things better Get Outlook for iOS

Arthur Lipper Chairman of British Far East Holdings Ltd.

September 30th, 2016

Typically those able to bring a similar product to market will have far greater marketing reduces than the product introducer due to the fact that they will tend to be more established and be more conservative in their risk taking.

Dane Madsen Organizational and Operational Strategy Consultant

October 1st, 2016

The second company in a space leverages their marketing budget by 2 x - theirs and the first mover that has to market like crazy to get any attention. Let them figure out how to explain the space or product, then you just talk louder. 

Steven Wolk Principal, Strategic Investment Consulting

October 2nd, 2016

Yes, you should ALWAYS be first mover - but not in the way you may think. Microsoft frequently created or acquired products after other popular products were in the marketplace (example: Excel vs. Lotus 123), or as someone pointed out, MySpace to Facebook, and many many more.

But if you are selling to the same target audience as someone else, your product, the way you deliver it, the selling process, the location, price, or something else must be different than the incumbent and provide value that the incumbent does not. 

Then you need to consider what the incumbent will do to compete and how fast-followers will try to out-value you. If you strategize that way and execute well, you will be able to stay ahead of competitors.

Consider Uber and Lyft. On the face of it, they provide the same service, but in reality the end-product is different and part of that is how they each interact with their drivers.