Let’s talk about first-mover disadvantage.
First Mover Advantage is widely cited by startups as guiding philosophy. They believe it confers an unbeatable lead in the market.
In reality, the first-mover advantage is a bit of a mixed bag.
First movers have to create a market. This involves educating customers about why they should care about solving a problem using your solution. It involves having to build a contrast to the status quo.
B2B first-movers often have to build speculative ROI calculations to convince prospects. Early customers tend to start with trials & many need multiple POCs to make up their minds. Commercial negotiations are tough as there are no references. There are also market development costs – having to educate customers using thought leadership material, events, etc.
B2C first-movers need heavy incentives to initiate trials with no guarantee of loyalty, once competition steps in.
Later movers have an advantage – they have the first-movers to contrast with & show they are better. They learn lessons from mistakes of first movers & adapt quickly.
So before you think you have a first-mover advantage, ask yourself – what are first-mover disadvantages? Balance these out & then move ahead.