First-Mover or Early Adopter?
With technology and innovation at its best, there are a good number of new firms sprouting up all over the world. Surprisingly, some of them have carved a niche for themselves in no time and have grown tremendously. When I wonder about the extent of innovation in today’s tech-world that is aiding such great successes, I realize that innovation has been there for ages. Coca-Cola being one great example of innovation brought in the concept of carbonated soft drinks as early as in 1886. Using innovation to gain first mover advantage worked in Coca-Cola favor. It was able lock-in a great market share and, with improved strategies, continued to be one the best in the industry. eBay is another great example of a first mover. It was the first company to take the auction process online.
Though it seems that being a first mover gives you a great advantage over your competitors as far as the market is concerned, not all first movers are successful. This is a high risk –high reward game. The product/service should be so unique and difficult to reproduce that would hinder other companies from entering the market. The initial journey should be so accelerated that a great chunk of the market is locked-in even before someone else dares to enter the market. With all that said, ‘first-mover’ strategy isn’t as successful today as it was decades ago. With advances in technology and easier access to valuable information, ‘early adopters’ are making a good fortune than the first-movers. Ultimately, no one remembers who leads a race at the half-way point. They care about who crosses the finish line. After all, Apple wasn’t the first mover in digital music, smartphones and tablets. But it did manage to emerge successful.
Being a first mover, you have the wonderful opportunity of exploring the industry, market and product. But you need to realize that your competitors are learning from your experience as well. Being an early adopter, you minimize your risks as you learn from the experiments of the first mover. However, your product offering should be good enough to shift the first mover’s customer base to your side. A classic example is that of Overture and Google. Though Overture was the first mover in the pay per click search engine and advertising system, Google’s AdWords soon overtook the market and continues to be one of the most successful search engines.
First movers and early adopters, both have their own advantages and disadvantages. It is, therefore, important to understand the industry and opportunity well enough to make the right decision. Remember ! this is a race and crossing the finish line is all that matters !