4 ms·

Is First-Mover Advantage a Myth? (with graphs)

19 points by inmygarage 17y ago

patrickgzill 17y ago
I know one of the guys from Dell's early days (he was in charge of DOS and Windows 3.1) ... he said their strategy was to definitely NOT be "first mover" ; instead they focused on being "fast follower", as soon as a technology was starting to gain adoption in the marketplace Dell would try to come out with an offering for it. This may not work in all cases, but it sure worked for Dell...
coryl 17y ago
Interesting theory, quite plausible in the web industry because everything moves so fast, as well as almost no barriers to competitive entry. Luck is so much a factor in timing.
jasonwilk 17y ago
It's true, there are no first mover advantages on the web anymore. If you have an idea that doesn't exist already, it's probably for a seriously good reason or it does exist somewhere and is performing poorly enough that you can't even find it after browsing 10 pages deep on a keyword search. What i learned from Ben Horrowitz, was that you need to find something that does work and has current market share (and market size), and make it 10x better. Making things 10x better and going after a defined market is the way to go. Forget the trending discussions of 1995-2005 that consisted of 'finding web concepts that no one had hacked up yet'.
indiejade 17y ago
A good article, but not a new theory. Two schools of thought regarding optimal competitive strategy: (1) "Traditional" economic input/output model: first-mover is a definite advantage, especially if being "first to market" allows a company to put up barriers to entry (or to influence any of the other "five forces") in the traditional economic model. Example would be patenting new technology. (2) "Hypercompetitive" model: becoming more apparent in the digital age, and especially pertainent to web-only companies. Rather than "reacting" to moves of competitors, firms in a hypercompetitive market must predict and prepare for competitive moves from their rivals.
- inmygarage 17y ago
  So then, given the current state of software patents (seems like they're difficult to attain and even more difficult to defend) how are you supposed to put up barriers to entry as a consumer web company? Are there examples of web/internet companies in the last 5-10 years that have succeeded by following #1?
  - indiejade 17y ago
    There's a difference between "first mover" and "first to market". First movers enter a market space first. First to market means that a company has launched an actual product within that market space. Startups all the time get funded with "just an idea," and even generate "buzz" or whatnot, but the real winners tend to be those who have their niche well-planned enough to effectively utilize those traditional market-force "forces" to their advantage. There are five of them: http://en.wikipedia.org/wiki/Five_forces http://en.wikipedia.org/wiki/Five_forces

19 points by inmygarage 17y ago

I know one of the guys from Dell's early days (he was in charge of DOS and Windows 3.1) ... he said their strategy was to definitely NOT be "first mover" ; instead they focused on being "fast follower", as soon as a technology was starting to gain adoption in the marketplace Dell would try to come out with an offering for it. This may not work in all cases, but it sure worked for Dell...

coryl 17y ago

Interesting theory, quite plausible in the web industry because everything moves so fast, as well as almost no barriers to competitive entry. Luck is so much a factor in timing.

jasonwilk 17y ago

It's true, there are no first mover advantages on the web anymore. If you have an idea that doesn't exist already, it's probably for a seriously good reason or it does exist somewhere and is performing poorly enough that you can't even find it after browsing 10 pages deep on a keyword search. What i learned from Ben Horrowitz, was that you need to find something that does work and has current market share (and market size), and make it 10x better. Making things 10x better and going after a defined market is the way to go. Forget the trending discussions of 1995-2005 that consisted of 'finding web concepts that no one had hacked up yet'.

indiejade 17y ago

A good article, but not a new theory. Two schools of thought regarding optimal competitive strategy: (1) "Traditional" economic input/output model: first-mover is a definite advantage, especially if being "first to market" allows a company to put up barriers to entry (or to influence any of the other "five forces") in the traditional economic model. Example would be patenting new technology. (2) "Hypercompetitive" model: becoming more apparent in the digital age, and especially pertainent to web-only companies. Rather than "reacting" to moves of competitors, firms in a hypercompetitive market must predict and prepare for competitive moves from their rivals.

inmygarage 17y ago
So then, given the current state of software patents (seems like they're difficult to attain and even more difficult to defend) how are you supposed to put up barriers to entry as a consumer web company? Are there examples of web/internet companies in the last 5-10 years that have succeeded by following #1?
- indiejade 17y ago
  There's a difference between "first mover" and "first to market". First movers enter a market space first. First to market means that a company has launched an actual product within that market space. Startups all the time get funded with "just an idea," and even generate "buzz" or whatnot, but the real winners tend to be those who have their niche well-planned enough to effectively utilize those traditional market-force "forces" to their advantage. There are five of them: http://en.wikipedia.org/wiki/Five_forces http://en.wikipedia.org/wiki/Five_forces