First movers get all the rewards or so says says the marketing myth. Don’t get me wrong. Being first can be a wonderful thing, until the other guys find out about what you are doing. It is my observation that the rewards are seldom there for the first to market.
Presuming the market is big enough for more than just your firm, it is likely that the competition has been studying the market opportunity just as long as you have. Only they hesitated to go forward and decided to learn from you.
You were the first one to market. You pioneered your way to market like an adventurer hacking your way through the jungle. Customers have been hard to find since people don’t want to take a chance on innovative products or upstart firms.
Building your brand awareness was expensive since you were not sure who your customer was and was not; given that uncertainty you threw out a big net to find out what fish you might catch. Product definition was “fuzzy” because of the lack of clarity about the customer needs. What about standards? Heck, you wrote the rules as you went. Looking back, it was easy to underestimate the difficulty of the task.
Now enter the other guys who will save money and time, since they won’t have to make the same mistakes that you did. Conveniently for them, you defined the customer opportunity and created the market. Many times the “second-to-market” or “later-to-market” firms make the bigger profits. For example, Apple’s iPod followed Rio and Eiger Labs after the market was created. Both had fully functioning MP3 players long before the iPod hit the scene. Ever heard of them?
Amazon.com founder Jeff Bezos recently warned his workers “being first isn’t necessarily enough.” For the entrepreneur in a smaller market, the impact of the second-to-market players may be less of an issue, but the same math still applies. Being first is expensive and difficult.
My recommendation for those of you who are first in your market is to quickly move on to being the best or different, since being first is seldom sustainable.
John Bradley Jackson
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