The Professional Movers Blog

If you want to win you have to be first, right? The first advantage of the theory suggests that the first company to introduce a true mass market to gain market share and, thanks to the competitive advantages developed, will also be able to defend its leading position of new entrants. The reasoning behind this is very intuitive, which goes along with the conventional wisdom, and if that was not enough, the principle has also been proposed by academics and executives from around the world. Andrew Groove, ex-Intel CEO, argued that “the first and only the first engine, the company that acts, while others dither, has a real opportunity to save time compared to its competitors and the advantage of time, this business is the surest way to gain market share. ”

There is much evidence supporting the theoretical model, but empirical evidence also emerge? Not quite. Consider the security market razors, disposable diapers, photographic film, laser printers, game consoles, VCRs, energy drinks, personal computers, Internet browsers, operating systems, search engines, libraries in online, online auction services, VoIP, and the list goes on. In each of these markets the leading position is held by a company that went after someone and marketing their products.

The question is: why, despite the lack of empirical evidence, people still embrace the idea that to be the first to enter a market is very important? There are three main reasons: the industrial, environment, natural monopolies and the bias toward the winners.

Industrial era, the environment, until the 1980s the rate of change in some sectors was much slower. Be the first to enter a market characterized by stable and predictable changes could produce significant benefits. Under the Information Age, however, the discontinuities are new to the market and face the day. Success as a result, no longer comes from being the first in the market but the product of rapidly evolving to become the dominant design. JVC VHS recording technology came to market almost two years after Sony Betamax. However, by licensing the technology to other producers, the creation of partnerships with content creators and the adjustment of features to meet customer needs and rental shops JVC succeeded in establishing the People’s University standard for video recording, driving Betamax out of the market.

Natural monopolies, some current prevailing market cost of capital and infrastructure constraints, which means that the first that can build a strong competitive position by simply entering the market before other players. This is the case of oil and gas distribution, water services and electricity. Natural monopolies such as those mentioned, however, are exceptions in most countries. In our modern economy to be able to understand customers, management of innovation and rapid adaptation to the discontinuities in the market are much more important than merely entering a market first. The most obvious example is the Internet. Google was not the first search engine. Amazon is not the first online bookstore. Ebay was not the first online auction site. All these companies are focused on understanding its customers, innovate and adapt their strategies to reflect market changes, which is what we give them as strong leadership.

Bias toward the winners in the long run there is a natural tendency to forget the failures and successes along celebrate. Not surprisingly, therefore, that people wrongly associated with long-term market leaders among the first to enter a given sector. Consider the case of laser printers. In 1971, Xerox developed the first working model at its Research Center in Palo Alto. IBM, on the other hand was the first company to market in 1976 .. HP entered the market almost 10 years later. HP, however, quickly evolved into the product mass to meet the needs of the market and succeeded in becoming the clear winner. HP has sold over 100 million units, it is no wonder people think it was the first company to sell laser printers. Even important people are confused. In the mid-1990s, during a visit to the HP facilities in Idaho, a former president of the U.S. congratulated the engineers at HP for “inventing the laser printer and the maintenance of U.S. technological leadership.”

Therefore, if the first to enter a market is not important, what is it then? Some of you may already have guessed. More important than entering the market first is to enter the market before a dominant design, and comes to better understand customer needs, innovate and evolve their product or service to become the dominant design. Contrary to what most people think King Gillette was not the first in the market for safety razors. Were invented in 1880 by brothers Kampf, and a decade before King Gillette started his company had already shavers security business for sale. Gillette, however, the product evolved rapidly, both by improving the design and creation of a business model where profits would be made with disposable blades. Carefully crafted business strategy, good understanding of customer needs and marketing enabled Gillette razor safety dominate the market for such a long period, not being the first to enter the market.