First Movers and Followers

Note: This was originally posted in a discussion as part of a Boston University Metropolitan College graduate-level course in E-commerce with Professor Jason Shapiro.

By bringing a new product to market first, a company has the first mover advantage, which is an opportunity to quickly gather market share and dominate the market before there is competition. Further, a first mover can create a network effect where all participants benefit from collectively using the same product (Laudon & Traver, 2017).

The cons of being a first mover are timing and organization. When you are first, sometimes the timing is not right, and the market is not ready. Conversely, sometimes the company is not ready and does not have the organizational structure to bring the idea to market successfully. Either way, though the idea is good, it fails (Laudon & Traver, 2017).

Though some first movers are renowned for success, historically first movers have been less successful than followers.

One example of a successful first mover is Amazon. Amazon was the first to offer customers an opportunity to buy books through the internet. Based upon research, Amazon founder Jeff Bezos hypothesized that as a standard product, books would sell well online. This knowledge informed Amazon’s well timed market entry (Dyer & Furr, 2014).

Apple’s iPhone is perhaps the best example of a successful follower. When the iPhone was introduced in 2007, smartphones were on the market. However, it was the iPhone that was revolutionary, changing internet access, photography, advertising and media consumption. The success of the iPhone catapulted Apple to the juggernaut it remains today (Molla, 2017).

Connecting to the notion that having the right team is most important to success, Apple and Amazon have both been first movers and followers.

References

Dyer, J., Furr, N., (2014). The Innovator's Method. Boston: Harvard Business Review Press.

Laudon, K., Traver, C. (2017). E-Commerce. London: Pearson Education.

Molla, R. (2017, June 26). How Apple’s iPhone changed the world: 10 years in 10 charts. Vox. Retrieved from January 21, 2021 from: https://www.vox.com/2017/6/26/15821652/iphone-apple-10-year-anniversary-launch-mobile-stats-smart-phone-steve-jobs