[Day2]

Another thread got me thinking/researching First Mover Advantage (the idea that getting to the market first allows you to have a better shot at owning the market).

I found lots of interesting articles about the subject, and what looks to be an exceptional book.

http://www.willandvision.com/book.htm
(The book site, which has a PDF of the first chapter)

http://www.amazon.com/gp/product/007...49639?n=283155
(The Amazon page-- 5 stars out of 10 user reviews. Pretty impressive)

Anyhoo, I encourage entrepreneurs to look at ten product or service companies they admire and research if they were, in fact, the first mover in their industry.

I'm gonna pick up the book. Anyone read it?

Cheers,

[akula]

nope, but I've read http://www.amazon.com/gp/product/078...lance&n=283155

Same story....the first guys off the block almost always end up as fertiliser for the guys who come in second and dominate the market.

Here's an interesting paper....but on a different theme: First Mover Advantage for Internet startups: Myth or Reality

all in all, I think it's beyond confusion that the better, more useful term is first mover disadvantage. Being new is an added risk and it's rarely managed.

[nado]

I would say myth.

Sometimes it will be an advantage, but if you don't keep on top of the game it will be quite easy for a competitor to come along, analyse what's working in the business, take them, add their own ideas into the mix and end up creating something which works better and has more appeal.

[Ashur]

Possibly the term should be recoined "first marketer advantage"

Innovators always take the risk and expense in developing and trying out new products.

However, the first to effectively market the product always has a greater advantage - once the majority of the market is captured, it is extremely difficult to convince customers to change their prefferences - unless there is a major innovation..

which brings us back square one.

[jdoc]

Michael Copeland wrote about this early this year regarding software startups in particular. He makes a strong case for why it's easier than ever to come up from behind and overtake the first mover:

http://money.cnn.com/magazines/busin...8119/index.htm

[Ashur]

Frustrating that this "theory" is taught as an across the board idea in Univeristy. I can see where its not the case

Its possibly also industry focused. After working in telecommuncation sales, I found how difficult it was to shift customers thoughts away from a (first moving) established major player. Even if offered a better cheaper product, customers would rarly take the deal.

Clearly in the software industry, there is little to none customer loyalty - most software buyers are looking for the *best* and *newest* product to fit there needs.

However look at Microsoft. Try bringing out a *better* OS or Office Package. Microsoft weren't the first to innovate or create OS or Office package, but there were the first to effectivly market. Good luck to anyone trying to budge them.

[Sport Skeds]

There's proof of first mover success in the Fantasy Sports industry...
...Lots of 'wanna-be' and 'follow-on' carcasses litter the landscape of business opportunity there. Fighting the Goliath's is a costly and painfully exercise...

IMO - the market is flooded - and differentiation is really difficult - those with the success and budgetary longevity have all the marbles... and this is a relatively new industry (10-12 years old)!

[toptemp]

Originally Posted by Day2

Another thread got me thinking/researching First Mover Advantage (the idea that getting to the market first allows you to have a better shot at owning the market).

I found lots of interesting articles about the subject, and what looks to be an exceptional book.

http://www.willandvision.com/book.htm
(The book site, which has a PDF of the first chapter)

http://www.amazon.com/gp/product/007...49639?n=283155
(The Amazon page-- 5 stars out of 10 user reviews. Pretty impressive)

Anyhoo, I encourage entrepreneurs to look at ten product or service companies they admire and research if they were, in fact, the first mover in their industry.

I'm gonna pick up the book. Anyone read it?

Cheers,

When I hear "First Mover," I think of Amazon.com. They were by far the first mover and they moved well and dominated the market in a way that no other company could do. It was all about branding and expanding as fast as possible before competition had the chance to take their share. I think the first mover advantage holds very true if you go in with the right skills and resources from the get-go, but if you don't, the company with the better mix of resources and execution can surely wipe you out. In a case where branding is important, I think first mover advantage is a must.

Take Starbucks for example... essentially, they were the first branded retail operation in the higher end coffee products. However, like Amazon, they had a plan. They planned to open 15 stores the first year, 20 the next, and then exponentially further down the road. By the way, I just thought I'd mention that they didn't franchise since they wanted to keep the brand, culture, and quality of service intact because those were their competitive advantages that allowed their first mover advantage to be an advantage afterall.

It's a little different, but look at Dell who got the first mover on the right business model.

Neglecting the latter case, I think that if you have the resources and are the first out, you have a great advantage.

[Day2]

Amazon.com....

http://www.revenews.com/adamviener/2...rt_walmar.html

Walmart.com has more traffic than Amazon. I'd be interested to know how Froogle is doing compared to Walmart and Amazon....

Wha? Starbucks as first mover? Dell as first mover?

The first mover advantage doesn't refer to business models-- it refers to being the first in a given market space.

And the idea of being the "first to marketing" or "first to effectively market".... Um. That's kind of a cop-out. By that argument, you could argue that Google was the first search engine to effectively market. Or Ipod was the first MP3 player to effectively market.

One of the arguements AGAINST the first mover advantage is that the pioneers come before you to invest huge sums of money to create the product and educate the market... Your "first to effectively market" statements is just reinforcing the argument against the first mover advantage.

A good example is Vonage, who is investing in educating the market that VOIP can actually be a valid alternative.

[toptemp]

Originally Posted by Day2

Amazon.com....

http://www.revenews.com/adamviener/2...rt_walmar.html

Walmart.com has more traffic than Amazon. I'd be interested to know how Froogle is doing compared to Walmart and Amazon....

Wha? Starbucks as first mover? Dell as first mover?

The first mover advantage doesn't refer to business models-- it refers to being the first in a given market space.

And the idea of being the "first to marketing" or "first to effectively market".... Um. That's kind of a cop-out. By that argument, you could argue that Google was the first search engine to effectively market. Or Ipod was the first MP3 player to effectively market.

One of the arguements AGAINST the first mover advantage is that the pioneers come before you to invest huge sums of money to create the product and educate the market... Your "first to effectively market" statements is just reinforcing the argument against the first mover advantage.

A good example is Vonage, who is investing in educating the market that VOIP can actually be a valid alternative.

You're quite mistaken. There's no point comparing apples and oranges or, in this case, Walmart to Amazon or Bricks and Mortar Retail to clicks and mortar. Amazon was the first successful online retailer without major distribution and warehousing capabilities and they were the first out. Also, you fail to look at profit margins and second, you fail to realize that if you have a share the size of Amazon's, you are clearly a success at least for the time being. It doesn't matter who's first in this case.

And starbucks virtually created their market. I wasn't talking about business models in their case.

Dell is applicable. Obviously, to win in the first out case, you must have a successful business model. All I was saying that they did win out being one of the first because they established a model that acted as their competitive edge.

You argued that it's about creating the product and educating the market. None of the above lost out due to creating the product; this only acted as an advantage. In addition, the market was growing so fast in the above cases, that no money was necessary to educate a market. These businesses simply needed to get out in the public eye and do their job well.

[Day2]

I'm quite mistaken? <gasp> Well, thanks for letting me know. I think you might have misread my post.

What I pointed out was that Walmart.com (which is an online store... "Clicks and Mortar", as you put it) has surpased Amazon in terms of ONLINE traffic. I don't know the margins, but Amazon is not famous for high margins (in fact, they are rather famous for the contrary). I certainly wouldn't argue that Amazon has not been successful. But the fact that a relative newcomer (Walmart.com) can eclipse them in terms of traffic is fairly telling. But sure, Amazon.com has been successful and will doubtless continue to be so. Will they dominate the market? No. And they don't dominate it right now. You should temper your enthusiasm for Amazon's gr