Credit: Shutterstock
Credit: Shutterstock

The second mouse gets the cheese: The myth of “first-mover advantage.”

Startups from Asia and Eastern Europe have been borrowing and successfully localizing ideas from their U.S. counterparts for years. In fact, there are advantages to being a “second mover”, says serial entrepreneur Michael Burtov. This strategy can be especially beneficial for startups founded by immigrants.

I can’t tell you how many times I’ve asked an eager, excited, starry-eyed founder about who their freshly-minted startup competes with – and gleaming with pride many say “No one; we are the first.” On the flip side, when I ask a grizzled startup veteran they usually rattle off a list of well-established companies that have every advantage, including the startup oxymoron: “first-mover advantage.”

There’s an urban legend in the startup ecosystem that being the first to market with an innovative idea guarantees success. However, if we dive into the dark cavernous annals of startups, history paints a very different picture. 

Fast followers or trailblazers?

Pioneering often does not equate to prevailing, and many successful ventures have thrived by being a “fast follower” rather than a trailblazer. This “second-mover strategy” can be especially beneficial for startups founded by immigrants, who can offer unique opportunities to leverage their diverse perspectives and experiences.

For example, companies like Facebook, Google, and Lyft underscore the advantages of being a second mover. Facebook won in the social media arena not as a pioneer, but as an astute observer that learned from the failures of earlier platforms such as Friendster and MySpace. Similarly, Google won the search engine games over platforms like Yahoo and Altavista by improving on their shortcomings.

Such examples serve as unique lessons for immigrant-founded startups, especially if the founders are from regions such as Eastern Europe or East Asia where a significant portion of market-leading products are effectively direct clones of Western startups. Not only do those areas have blatant copies of Google, Facebook, and Uber, but also thousands of smaller platforms. 

Everlasting change

Oftentimes, founders that grew up using these clones bring a rich tapestry of unique experiences and perspectives that enable them to identify and apply innovative improvements to existing concepts. Their diverse backgrounds can provide fresh insights into the needs and desires of a broad range of consumers, allowing them to fine-tune products and services in ways that resonate with a wider audience.

The idea of continuous improvement is in many ways the core of innovation. Rooted in the Japanese concept of “kaizen“, this philosophy advocates that ongoing, incremental changes can lead to significant breakthroughs over time. 

In pioneering new markets, first movers face the onerous task of market education. They bear the burden of fostering customer acceptance, creating demand for a novel product or service, establishing efficient delivery methods, and formulating the right pricing models. The initial missteps and stumbling blocks faced by trailblazers provide lessons for second movers who can capitalize on those experiences to streamline their market entry.

Historical examples of first movers failing to maintain their market lead are plentiful. Consider the case of Kodak, a pioneer in digital photography that failed due to a lack of strategic adaptation. 

Inspirational lessons

Similarly, VisiCalc, the creator of the first spreadsheet software, was eventually outpaced by competitors like Lotus and Microsoft that improved on their original concept. Companies like Netscape, Palm, Atari, and CP/M helped redefine the world with disruptive first-mover innovation, only to join thousands of other first-mover companies to dramatically fail. 

In fact, according to Forbes, first movers have a 47% failure rate, while “fast-follower” companies have an 8% failure rate.

These are inspirational lessons that are particularly valuable for immigrant-founded startups. Immigrant entrepreneurs often operate with limited resources and networks, so their ability to maximize the use of available resources and learn from the market is crucial.

Success does not always lie in being the first to market. Rather, it primarily resides in a company’s ability to observe competitors, learn from their successes and failures, continuously improve offerings, and to adapt to evolving market dynamics.

Embracing a second-mover strategy can be especially beneficial for immigrant founders. It allows them to harness their unique skills, resilience, and ability to navigate change, which are all key attributes for startups hoping to succeed in the long run.

Another lesson to be learned for all startups, including those helmed by immigrants, is that if you are the type of founder that brags about being a first mover, you should stop.

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