We hear so much about the value of being the first to the market with an innovative new business idea. These first movers are generally thought to have a far greater chance of success than do later entrants to the market. They are often able to attract and retain a large number of customers before their later entrant competitors are actively participating in the market.
However, not all first movers are able to hold on to a dominant market position in the longer term. Sometimes, stronger competitors enter the market a bit later, yet end up with a far more dominant position. These successful later entrants generally have greater resources or other market advantages that the first mover lacks.
We are reminded of these first mover issues when looking at today’s situation with the companies that offer AI. Open AI with its ChatCPT product was a first mover. Initially, it looked like other potential competitors, such as Google, for instance, might be left behind. But soon, Google products like Gemini were successfully competing in the AI market. There were other late entrants as well. And, soon, Open AI lost its former dominant first mover position. Ultimately, Open AI declared a code red in an effort to retain a strong position in the market.
The eventual outcome in the AI market remains to be seen. However, the AI example clearly illustrates how being a first mover, like OpenAI was with ChatGPT, is no guarantee of being the most successful in the marketplace.
So, in conclusion, being a first mover can be a powerful advantage. But, as OpenAI’s situation illustrates, being a first mover is not necessarily a guarantee of ultimate success. Instead, becoming a succesful player in the market can depend more on a company’s strengths than it does on upon being a first mover.
