First Mover Advantage, with “advantage” right there in the name it’s safe to assume it is desirable to be the First Mover. Or is it?

The Pros

– Market share

– Power to set price

– Ability to build relationships with customers and suppliers

– Gain brand recongition

– Jump start on realizing efficiency gains due to employee experience

– Ability to create & control IP

The Cons

– High cost of R&D

– Need to protect IP

– Risks developing the “wrong” product at the “wrong” time

– High marketing costs to introduce the product & educate consumers

– Lower return on investments than competition

– Need to develop a supply chain that can meet unique resource requirements

– Competition eventually diminishes advantages

Ultimately all of these benefits and risks are dependent on the particular market being created or revolutionized. Being the First Mover when there is low market uncertainty and  the competition is slow to market is ideal. However in uncertain markets and those where it is easy for competitive products to be released, the risks out weigh the benefits.

Personally, I’m wary of being the First Mover. I’m more comfortable being an Early Entrant, that way there are some lessons to learn from and proof that a market exists.

After all, The Second Mouse Gets The Cheese.