Gaining First-Mover Advantage
First-Movers Create Industry Disruption that Can Give Them an Edge
First-mover advantage is the idea that a business can gain competitive advantages by being the first to market, either with an entirely new concept or an innovative disruption in an existing industry.
Arriving first theoretically allows a startup to establish a beachhead of brand recognition, customer loyalty, and early market share.
However, technology moves quickly. Even when companies do an excellent job of analyzing competition, a first mover with no competitors today could easily have competitors tomorrow. After all, if your team was able to produce your idea and build a product, there’s a particularly good chance that there are twenty other teams all around the world working on the same idea and product.
Are there situations in which being a first mover may be a significant bar to future competitors? Yes, but it probably doesn’t happen as often as entrepreneurs might wish.
Here are five situations in which the first-mover advantage might be significant.
- Your product has a technological advantage that is difficult for other competitors to match (either because of the difficulty of replicating it or because of patent protection), or you have an inherent cost advantage in producing the product that other competitors cannot match.
- Your product is particularly well-suited to a subset of the overall market that is big enough to be interesting to you, but not so big as to draw numerous other competitors.
- Through agreements you secure early, exclusive access to key distribution partners or supplier partners that your competitors will be precluded from working with.
- You can reach sales agreements quickly with large, important customers in your market that will be influential on purchase decisions by other potential customers.
- Your product is easy to adopt and sticky, and you can quickly and inexpensively create a network of users that will find it difficult to leave once they adopt it.
Just because you get to market first with a product does not mean you won’t be bludgeoned by later competitors. What’s your startup’s best idea for researching the competition? We’d like to know.
