Is it best to be first to market with an idea? Or is it best to be a follower in a market? Let’s explore a few commonly discussed items about being first to market (FTM) versus being a follower:
Where Being FTM is Bad
- FTM spends a tremendous amount of money educating the market; followers do not have that cost burden
- FTM spends a tremendous amount of money trying to figure things out; followers often learn from the mistakes of FTM
- Rarely are markets winner take all, so being FTM really does not prevent followers from stealing market share
- The advantage of being FTM pales in comparison to the advantage of having a well-executing startup. A well-executing startup will win more often than not, independent of if it is FTM or following
- FTM often has to prove out an idea that will not pan out; it often fails
Where Being FTM is Good
- If intellectual property is important and defensible via patents, being FTM can be a strong position. Rarely are patents helpful to startups, given the nature of legal fees, limited cash resources of startups, and delays in the US patent granting system.
- In winner-take-all markets, FTM may be able to grab the market before followers roll-in
- Press can be better for the FTM, because press likes to cover new things, not follower thing
What are you thoughts on being FTM versus following?