First mover advantage?

First mover advantage is part of the standard lore of the I-Cubed Economy. It means that the first company into a market generally wins. The idea is that the first mover benefits from technological lock-in. But that only works if the first mover sets the product standards and there is high cost to the consumer of switching to a different competitor.
What is the alternative? Many have argued that beginning a “fast follower” is a better strategy. Steve Blank outlines this strategy in a recent article — You’re Better Off Being A Fast Follower Than An Originator. According to Blank, first movers (those who are first to sell a product) have a 47% failure rate. Fast followers (those who enter early but not first) have an 8% failure rate.
In part, this should not be surprising. Not every product is a success. In fact, most of them fail. So the first movers are those that clear out the duds. Fast followers have an easier strategic choice since they are coming into a proven but nascent market.
This does not mean, however, the there is no first mover advantage. A first mover who throws a lot of products at the market is bound to have success — even if their batting average is low on anyone product. And a first mover who does succeed in establishing lock-in with high switching costs will likely succeed (for example in the pharmaceutical industry).
For me, the bottom line is not first mover versus fast follower. The real question is finding the strategy that is right for the product and right for the market.

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