The Great Myth of 1st Mover Advantage
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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 from 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, MP3 player, 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 and 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 Advantage of being the first mover
The advantage of being a first mover is that if your product is successful, you get brand recognition.
You can create a larger and lasting impression.
You also have an initial sales advantage.
Or you can also manage to sustain this advantage over a period of time.
For example Gillette safety razors.
Sony in personal stereos.
Disadvantages of being a 1st mover
In the long run, the sales advantages of the first mover brand are less than the disadvantages of increased costs and associated problems.
Pioneers are always less profitable than the 2nd and the 3rd entrant.
As a 1-st mover, you need to create awareness, then 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 pioneers and can save a huge amount of money by trying new things which may not work.
The late entrant can adapt to better and more efficient technologies-making it a more efficient business.
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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Hemant Mishrra
About the author: Hemant is the Founder & CEO of branding and marketing firm ”Neeti Brand Accelerator” in Mumbai. He is a brand strategist and has worked with more than 150 brands during last two decades. He is also mentor and coach to SMEs and startups. You can visit the website www.www.neeti.biz. You can also contact him at hemant@neeti.biz
