FIRST MOVER DISADVANTAGE By Jay Jacobson , April 11, 2006 http://kinetic.org The other night I watched the movie The Aviator (one of my favorites). PanAm and TWA, two of the original big airline companies responsible for forging much of the early passenger airline market in the USA, are featured in the movie. At the time, those two airlines were huge - they got into the market quickly, defined it, and dominated it. Then it struck me... where are either of them today?!? Out of business and swallowed by other airlines that came to market much later. How did that happen? A lot of folks talk about "first mover advantage." The premise is that the first person/company to get into the market with a given idea will dominate that market. With a couple of rare exceptions, I could not disagree more. The fabled first mover advantage sounds good on the surface, but it is not so rosy when examined in-depth. Some modern examples of products where the first mover is a big loser and the "late to market" folks really took all the marbles: Apple's iPod, Google, Microsoft Windows (and Office), Dell, and Oracle. None of these huge business successes were the absolute first to market with their type of product. They did not do it first - they did it right. There is a big difference. This seems to also be true in the non-technology world. Some non-geeky examples would be Wal-Mart, Starbucks, and McDonald's. Again, none of them were the first to their respective markets. The first mover is left with making all the mistakes, finding the market, educating the market, and wasting a ton of time and resources figuring out what works and what does not. If you have ever started a company that has a truly new technology or offering, you know that educating a market really sucks. I think that the vast majority of the time (and I think history and the real-world backs me up on this one) being the first mover is a huge disadvantage. It is far better to get into the market later when you can learn from that first mover sap's mistakes, see the obvious pitfalls, and see what the market really wants and needs (what people say they like is very different from what people actually want). Sure, there is a bell curve going on here; it is certainly possible to enter a market too late. However, being the absolute first to market is very rarely a great thing. Remember when Apple announced the iPod? Who thought the world needed yet another MP3 player? Remember when Google launched? Who thought the world needed another search engine? All you folks that tout the first mover advantage have it all wrong; get out of your textbooks and take a hint from the real world. First to market sucks. First to market done right is the real ticket, and it is unrealistic to be able to define "done right" until someone has at least started carving the path and screwing up ahead of you. Of course, speaking from experience, being the first is also very good for your ego, and it is very cool. Visionaries really get off on things like that.