oday, the internet has become part of our daily lives. People go online when they are in need of any product or service. The advent of search engines like Google has made our lives easier and more convenient. Now, you can search and buy almost anything you want by a click of a button. Making the buying and selling process safer, faster, and cheaper.
From the recent studies, it has been identified that there are now over 3 billion internet users worldwide. This significant number of users is the main reason behind the popularity of online marketplaces such as eBay, Amazon, and Alibaba.
Unfortunately, many young entrepreneurs have not exploited this opportunity. Those jumped in early and made use of the available tools online are now reaping the rewards. It pays to be a first mover in this dynamic, fast-paced world.
The phrase “First Mover Advantage” was coined in 1988 by David Montgomery, a Stanford Business School professor, together with his co-author, Marvin Lieberman. In 1993, another paper was popularized by Peter N. Golder and Gerard J. Tellis. This latter study presented a more accurate way to categorize how start-ups enter new markets.
Innovator First to patent or develop a new product or idea
Product Pioneer First to have a working product model
First Mover First to introduce or do product selling
47% failure rate
Fast Follower Entered in the market early but not necessarily the first 8% failure rate
With the known latest study, I would agree that being a “Fast Follower” is a better term. Nobody wants to lose money. So, when entrepreneur’s say “First Mover Advantage”, I’m sure they mean “Fast Follower,” knowing that this leads to a significantly lower failure rate. Sometimes are just ill-informed and need some guidance. This term will often be confused and interchanged but in their eyes, it means the same thing. What’s important is who can consistently operate quickly and in a timely fashion.
To take advantage of new opportunities, you have to be quick and smart in your actions. The U.S. Marines say that in war, speed is a weapon you need to win.
Here are the reasons why you need to be first:
When you are first,
1. You become the standard.
Name recall is easy for first movers. You become the original brand.
2. You have the privilege of protecting your IP first.
3. You gain quick market share while no one else is out there.
Ex. Toyota Prius got a significant market share for Environment-friendly cars.
4. The Learning Curve Effect.
You entered the market early. You know how your product works. You learn from your mistakes and correct them. You also know and understand how to solve your customer’s problems.
5. You gain strategic resources.
6. You develop good relationships with your target market (retailers, suppliers) early.
They won’t go with the competition. You get them locked in. If you already bought an IBM Thinkpad, you won’t shift to any other notebook.
7. You can charge a premium for being first.
People will pay more for your product or service because you are an innovator. When competition comes in, you already had a window to make more money than them.
8. You are one-step ahead of the game.
Many people tend to explore online businesses when they are tired of the traditional 9 to 5 business or when they lose their jobs because of the tight economy. Everyone dreams of earning regular passive income through the use of different online channels. This idea seems impossible before but with the advent of the internet, any person can start running his own web based business without any doubt on the mind.
People who start online companies can enjoy a broad range of benefits and advantages in the long run. As you already know, there is a huge untapped potential customer base, and you can reach them with your products and services. You just need to pitch the right product to the right customer. This effort will give a boost start to any business. You will not have to go in search of clients because they will come to you. At the end of the day, you will get the opportunity to enjoy profits along with a huge sales volume.
Online businesses are cost-effective. You don’t need to have a lot of capital to start a web based business. For example, you don’t need to have a physical space for your company as everything can be set-up online. This fact has dramatically reduced the costs that associated with web based businesses. While saving a lot of money, you will be able to increase your sales volume and profit without much hassle. Most of the things in web based businesses are automated, so you don’t need to seek the for manual labor. Creating a system can save an enormous amount of money for your business in the long run.
A web based business can is the best opportunity available for an entrepreneur to reach the global market. You can think of selling your products and services to people in every corner of the world. Putting your business online can also help you to gain competitive advantage and credibility. A wide range of business opportunities are available, and you can think of starting any business.
However, many people are discovering the benefits of selling online at the moment. If you are planning to start your own business, you need to act fast as time is money in every business. Therefore, it is better to start your business as soon as possible and stay focused until you reach your business goals.
Do you have a business idea that you can’t wait for the whole world to know? Is it something that you believe when introduced to the market early can be a huge success? What’s stopping you to from implementing it now? I’d love to hear from you. Share your thoughts in the comments below.