First Mover Disadvantage
These days the barriers to entry for someone starting a company are extremely low. This scenario presents an interesting challenge for innovative entrepreneurs who come up with an original idea. If they bring it to market then they stand to capture a significant amount of attention from their innovation, but they will also expose the weaknesses of their specific implementation for all to see.
Releasing early and often is great, but once you've gotten to the point of releasing something it suddenly becomes very difficult to see the forest through the trees or even keep track of all the trees you've planted and make sure they all look good. Meanwhile a competitor can come along and identify (probably within a few minutes) 5 to 10 areas in your application that can be improved. If the idea is interesting enough to them and they have the right skills they may very well decide to build the better mouse trap, improving upon your very innovative idea with only a little extra innovation.
A good example of this is in the social networking space. Companies like Friendster were the first to the market with significant innovation in the space. Unfortunately, despite all of their initial innovation, they didn't get it quite right and left the door open for a raft of competitors (MySpace, Facebook, etc.) who put their own twist onto the original innovation. In the end, even though Friendster did much of the heavy lifting and captured a lot of the market as the First Mover, they were unable to find the same success that the follow-up competition did.
Innovative entrepreneurs who move into a market first may be the giants out there, but the guy on their shoulders still has the better view. In today's competitive landscape it is becoming easier and easier for people to climb onto the shoulders of entrepreneurial giants very quickly. Hence the First Mover Disadvantage.
Note: Patents may still be a viable option for protecting first movers even though they take so long to be realized (Friendster Wins Patent)
Releasing early and often is great, but once you've gotten to the point of releasing something it suddenly becomes very difficult to see the forest through the trees or even keep track of all the trees you've planted and make sure they all look good. Meanwhile a competitor can come along and identify (probably within a few minutes) 5 to 10 areas in your application that can be improved. If the idea is interesting enough to them and they have the right skills they may very well decide to build the better mouse trap, improving upon your very innovative idea with only a little extra innovation.
A good example of this is in the social networking space. Companies like Friendster were the first to the market with significant innovation in the space. Unfortunately, despite all of their initial innovation, they didn't get it quite right and left the door open for a raft of competitors (MySpace, Facebook, etc.) who put their own twist onto the original innovation. In the end, even though Friendster did much of the heavy lifting and captured a lot of the market as the First Mover, they were unable to find the same success that the follow-up competition did.
Innovative entrepreneurs who move into a market first may be the giants out there, but the guy on their shoulders still has the better view. In today's competitive landscape it is becoming easier and easier for people to climb onto the shoulders of entrepreneurial giants very quickly. Hence the First Mover Disadvantage.
Note: Patents may still be a viable option for protecting first movers even though they take so long to be realized (Friendster Wins Patent)
posted by The Entreprexplorer | 8:17 AM
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