Thursday, 19th October 2017

The Fallacy of First Mover Advantage

Posted on 25. Apr, 2012 by in Blogs

You work for a startup. Product development has taken twice as long as expected. Market conditions have shifted and you’re certain someone else is working on a similar idea. You feel a sense of urgency to get the product out the door before first mover advantage slips through your fingers.

Sound familiar? If so, perhaps you should take a deep breath and reconsider your haste—64% of first movers fail entirely.

That must mean that just over 1/3 of companies do gain an advantage by shipping first. Or does it? I’d suggest that an ability to execute contributes more to a company’s achievement than the day a successful first mover releases its product.

People tell entrepreneurs they don’t need to develop business plans. After all, your model is going to change anyway, so why waste the effort?

I tend to disagree. While it’s true that you will very likely pivot when testing your ideas about customer need, market size, demand, and other critical success factors, a plan gives you the ability to articulate hypotheses and a structure for testing them. Include soft elements like core values and you have means to assess cultural fit from the time you begin to attract talent.

Unlike the business plans you may have learned to write while earning an MBA, startup plans are not voluminous. They facilitate execution by establishing guidelines, expected performance, and red flag moments. Reach a red flag without achieving expected outcomes and it’s time reassess your assumptions to ensure time doesn’t continue to slip by unnoticed. Reflection on why things aren’t working as expected enables smart pivots in shorter time frames.

When used appropriately, a plan will help the company focus on how to scale earlier rather than later. Consistent, planned growth in all stages prevents wide revenue swings and helps keep the company in the black. Managing growth is an important form of discipline.

Success rarely happens by accident. The idea that being first to market gives a company an advantage is an illusion. Too many other factors contribute to an organization’s ability to win in the marketplace. You can, however, stack the deck in your favor.

Read Great by Choice by Jim Collins and Morten T. Hansen to learn more proven techniques used to build great companies from the ground up.

Post By Marcia Moran (314 Posts)

Marcia Moran

Marcia Moran

Marcia Moran helps organizations reimagine what’s possible and provides the framework for clients to achieve stellar, long-term results.

As a Performance Architect, Marcia uses the principles discovered through neuroleadership and positive psychology to deliberately design the employee experience and corporate culture. Blended with pragmatic systems design, these elements free people to play to their strengths while reducing strife in the workplace. As a result, people can push beyond their known limits as individuals, as teams, and as companies.

Marcia is also the Vice President of Marketing for Intelishift, a colocation company with operations in Ashburn, VA and Silicon Valley. Prior to moving to the Metro DC area, she worked as a business consultant for Up ‘N Running and advised startups and small businesses in the areas of management, operations, and marketing.

Marcia earned an MBA from Chapman University. She loves to travel, speaks Norwegian, and unwinds by kayaking and painting landscapes. Marcia recently co-founded Positive Business DC with Shannon Polly and Donna Hemmert. Positive Business DC provides resources to help people increase the levels of well-being in the workplace and at home.

Website: → Performance Architect

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