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 !
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