First Mover Myth

Occasionally I run into someone who trots out this smart-sounding post hoc ergo propter hoc fallacy that many b-school student learn about.

A post hoc ergo propter hoc fallacy is a fallacy of false cause.  Someone sees a business that started something become successful, while competitors seem to languish, and they attribute this to some fanciful idea of a “first mover advantage”.

Recently someone brought this up to me while discussing a new product trial.  This product trial is in a highly untested space.  Many people think there’s a huge potential with this product since nobody is in this space “yet”.  (Though there may be good reasons for that, which they don’t seem to consider.)

They rattle off that this product will get a huge “first mover advantage”.

I ask, do you think there’s anything to that?  Like how Microsoft was the first to word processors, spreadsheets and graphical user interfaces?  Or Netscape was first to web browsing? Or Google was first to online search?  Or Facebook was first to social networking?  Or how Apple was first to the portable digital audio market? Or better yet, like the 8 out 10 new businesses and products that fail trying to get a first mover advantage?

I don’t think it’s being the first.  I think success has a lot to do with offering products and services that customers want, for whatever reason (and sometimes those reasons are mighty elusive).  First movers can and do win, but it’s not because of the illusory first mover advantage.  It’s because they have good products.

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