First mover advantage (FMA) is a situation many entrepreneurs try to achieve. This can be defined the advantage gained by the initial ("first-moving") significant occupant of a market segment. It may be also referred to as Technological Leadership. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match. Mechanisms leading to first-mover advantages
There are three main mechanisms that lead to first-mover advantages:
-Preemption of scarce assets
-Switching costs and buyer choice under uncertainty
Magnus Carlsen has proven many times that there is a first mover advantage in Chess. By starting with white, a professional chess player can achieve an advantage by being "ahead of the game".
Very few entrepreneurs are able to achieve this. Instead, they face the First mover disadvantages:
-Resolution of technological or market uncertainty
-Shifts in technology or customer needs
Much of the problem with the concept of first mover advantage is that it may be hard to define. Should a first mover advantage apply to firms entering an existing market with technological discontinuity or should it solely be new markets? The definition vagueness has certainly named undeserving firms as pioneers in certain industries, which has led to some debate over the real concept of first mover advantage.
Another common argument is whether first mover advantage constitutes the initiation of research and development versus the entry into a new market. Typically the definition is the latter, since plenty of firms spend millions in research and development that never enters a market. Many factors should affect the answer to these questions such as the sequence of entry, elapsed time since the pioneers first release and categories such as early follower, late follower, differentiated follower, etc.
Entrepreneurs can make a big difference for a firm when deciding whether or not they should be followers or pioneers. But they normally need a good portion of LUCK in order to find themselves in a situation where they can make these decisions themselves. Luck is not entierly random, though:
“Good generals make their luck by shaping the odds in their favor” (MacMillan).
You can achieve "luck" by performing some actions that help you increase your chance, by #ShapingTheOdds!
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