First mover advantage isn’t a strategy. It's a fallacy.
I am often puzzled by the desire to gain first mover advantage. It’s a goal touted by people at all levels of seniority, and I genuinely find it to be a head-scratcher. Fine, it’s an easy way of articulating the desire to gain a march on close competitors - to unlock new technology faster, or to enter into a new market before others. The thing is, it rarely leads to a true advantage. It’s the solutions that come after the first mover that stick.
- Tesla? Not the first to mass-produce an electric car.
- Spotify? Don’t forget Napster.
- Tipp-Ex? Liquid Paper beat that (trivia alert: invented by Bette Graham, whose son, Mike Nesmith, became one of The Monkees).
The best way to compete with someone? Copy them, and then do it better. Or cheaper.
Most first movers therefore only show that there’s a market to be had - they open the door for others to just step in and eat their lunch.
It’s a similar argument to that put forward by Nicholas Carr in the Harvard Business Review back in 2003. The hugely abbreviated headline: don’t invest in IT R&D… just copy what other people are doing, and let them spend their cash working out the kinks in complex solutions.
I believe that the rhetoric around first mover advantage is often confused by what people are actually after: sustainable competitive advantage. And, that’s a far harder, and more meaningful hurdle to clear.
Sustainable competitive advantage implies doing something…
- That lasts. Your solution is durable and can stand the test of time.
- That is better than the rest. Moreover, it can’t be copied.
- That your market actually wants. People see value in what you’re doing.
First mover implies that simply being there before anyone else ticks all three of the above. It doesn’t – it really only ticks the second two. For a bit. It can give you a leg up over your competition for a while, but you are not going to build a lasting business around it.
We often talk with our clients about this search for sustainable competitive advantage. It’s hard. It involves making tough decisions… and maybe realising that you can’t have a tick against all three in all cases. That means you’re building a business based on knowledge of what you have to defend. You know where others can hurt you. But, you also know where you’re placing your bets.
Whatever the scenario - being there first isn’t necessarily the goal. It’s not a race. In business, coming second can be a winning move for the long term.
