The Myth of 1st Mover Advantage

First Mover Advantage is not a pretty thing.
It is a myth that carries on and on from marketing books.
From marketing experts.
Everybody accepts this as the gospel truth.
First mover advantage is a marketing lie, most of the time.
It has stopped millions of entrepreneurs into believing that if they are not the first with a big idea-they are doomed.
History says otherwise:

– Facebook was not the first social network
– GM did not invent the car
– Apple never built the first tablet, or MP3 player, or smartphone, or a mouse
– Microsoft was not the first with most of the things- an operating system, office software , corporate email system, or the console
– Google did not come up with the first search engine
– McDonald’s was not the first hamburger restaurant
– Coca-Cola was not the first soft drink
– Wal-Mart was not the first supermarket
– And on and on….

Sony Walkman, Motorola cell phones are a few product innovation examples where the first mover had an advantage for a few years.
Both companies are no longer in those businesses.

The advantages of being a first mover is that if your product is successful, you get brand recognition.
You can create larger and lasting impression.
You also have initial sales advantage.
You can also manage to sustain this advantage over a period of time.
For example Gillette safety razors.
Sony in personal stereos.

But the disadvantages of 1st mover are too many to even merit a discussion.

  • In the long run, the sales advantages are less than the advantages of increased costs.
  • Pioneers are always less profitable than the 2nd
  • As a 1-st mover, you need to create awareness, than convince people to buy your product-and the most difficult part is that you need to teach people how to use your product.
  • The late entrant can learn from the mistakes of pioneer and can save a huge amount of money in trying new things-which may not work.
  • The late entrant can adapt to better and more efficient technologies-making it more efficient business.

A research done on 500 brands and 50 categories has shown that 47 % of 1 st movers failed.

Hence, if you are not the first off-the-block, you need not worry.
It may be the biggest blessing in disguise.

First to market-First to fail.

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