The general thought is that if you’ve got a good idea – and no one has done it just yet, or not in the way you’ve conceived it, being first to market means live or die. Here at F3FundIt we think this approach is pretty much wrong.
There are clear benefits to first mover advantage, but there are also a number of other factors that have to be taken into consideration. The first and foremost of these is strategy.
And by strategy we mean launch strategy, short, medium, and long term. One of the biggest problems that we find wrong with start ups, is that they plan ahead for 6 months to one year, and then wing it. However, after those initial six months when the business is already operational, will the management of the company really have the time to create a thorough scenario analysis for the next six months, year, three? The short answer is no, however, they will waste valuable time doing just that when they could instead be spending that time readjusting the business model to best fit the pre-launch misjudgements.
Take for example the case of Lycos, Infoseek, and WebCrawler that all launched in 1995. Then Google comes in three years later, and the rest is history.
Those first search engines had a three year start on Google, but why did they get relegated into the annals of net history while Google took the undisputed heavyweight search crown. It all comes down to strategy.
The code behind Google has already existed prior to its launch, but they decided to hold off a bit. Why? Well in 1998 the internet was just starting to reach its critical mass, the 56k modem came standard with home PC’s and overall connectivity was cheap, $19.95 per month.
In 1995, the facts were a bit different, the equipment was too expensive and and connection speeds too slow for anyone to really use the net outside of institutions.
So the question you should ask yourselves is, is it the right time, are we ready, do we need to be the first, and prepare, prepare, prepare.
And to close, I will quote David Masó who recently told me during a chat “The good entrepreneur is he that resists and pursues their dreams in a smart way”.