On Being First To Market Versus Following

September 24, 2014

in Marketing, Product Management, Starting Up

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?

Previous post:

Next post: