Why “First Mover’s Advantage” actually sucks!

I’ve been hearing so much about disruption & walking the ‘Road not taken’ this past few weeks, and that how important it is for startups and entrepreneurs to be the first-movers in a particular market, that I thought I should summarise why the same may be a tad bit over-rated.





Here’s why:


  1. You end up making costly mistakes

  2. You absolutely have to be lucky

  3. There are no standards

  4. Navigation is just hard

  5. You have to educate


1) You end up making costly mistakes


It’s safe to assume that if you are starting up, you have relatively less resources and are working on shoe-string budgets. A wrong hire or an incorrect assumption, costs a lot; both in terms of time & money. And no matter how experienced you are, you’ll definitely make some. There’s a healthy possibility that your experience might work against you in an unknown territory!


Actually, if you are a first mover, you’ll make some mistakes that you din’t even know were mistakes till you’ve gone waist deep! Realisations tend to take longer.



2) You absolutely have to be lucky!



There will be bets that you will have to make while running your Startup that no amount of rational deliberation will help you conclude. Being a realist, it will be hard to rely yourself on your intuition and for that hunch to reveal itself to be true, you’ll need good-to-fair amount of luck. Kind of explains why the ratio of success is < 0.2% amongst disruptive ideas.



3) There are no standards


Obviously.


The whole point of satiating your risk appetite is, so that you get to become the industry standard!


That’s a good quirk and everything. But it comes with a towering high probability of being shattered to nothing. And when that probability transients itself into daily questions like “What’s a good MoM growth percentage?” Or, “What’s the standard multiple on ARR to get to a valuation?”; it only acts as a frustrating road-block in an already highly volatile environment.



4) Navigation is just hard



I’ve always liked defining a Startup as a journey of going from point A to point B in an efficient fashion and a highly rigorous regime. But when you are creating your own industry, there’s no point B in sight. Hell, there’s not point B as yet! Only mirages that you are hoping are actually patches of water in an otherwise dry desert.



5) You have to educate!


When you are doing something new, like what Apple did commercialising a computer, or, what Amazon did delivering things to your houses; you have to invest a lot of time, energy and resources into making people understand what you are trying to do. Your message has to reach and resonate with your potential customers in all kinds of shapes, ways and forms. It literally bleeds your bank accounts with a hope of finding the pot of Gold at the end of the Rainbow.



After all, Google was the 5th company to enter the search engine market and Facebook was 17th to try to capture the social media industry!


However, having said that;


there’s absolutely nothing that beats the poetic way in which this Apple Ad shatters everything I’ve written above, to pieces!




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©2021 by Yash Shah