Recently, during a discussion with the Postgraduate Diploma in Business Management (PGDBM) class at the Chennai campus of IIM-Trichy, a question arose regarding the reliability of first-mover advantage in securing market success. The concept of ‘first-mover advantage’ is often overvalued, and historical evidence suggests that early entrants do not always dominate their markets. While being first can enhance visibility for a startup, it also necessitates that founders educate customers, address unforeseen challenges, develop an ecosystem, and invest in shaping a market category. In contrast, late entrants can bypass these costs, often emerging as winners. This phenomenon is likened to entering a dense jungle on foot: the pioneer may clear a path, but others can swiftly navigate the newly established route and even surpass the initial explorer.
In his book, “Failing to Succeed,” the author introduces the idea of ‘first-mover disadvantage.’ Examples in the tech industry support this perspective. Google was not the first search engine; however, it surpassed earlier competitors like AltaVista and Lycos by offering a superior product. Similarly, Facebook entered the social networking space after MySpace and Friendster but became the leader through its focus on simplicity and fast execution. Apple introduced the iPod after existing MP3 players but won the market due to its innovative design. YouTube, which entered the video-sharing domain after platforms like Vimeo and Metacafe, ultimately triumphed because of its user-friendly interface. Despite Nokia’s dominance in the mobile phone sector, the iPhone, introduced later, revolutionized the market.
In India, Ola emerged as a taxi startup after Meru and others but outpaced them through its asset-light model and effective driver onboarding strategies. Flipkart capitalized on the ecommerce ecosystem several years after Indiaplaza, timing its entry perfectly as payment systems and logistics matured. Swiggy focused on reliability and delivery management upon entering the food delivery space, distinguishing itself from earlier players like Foodpanda and JustEat. PhonePe did not pioneer UPI payments but scaled rapidly due to its straightforward onboarding process, outperforming initial market entrants. Zepto, entering the quick commerce market after competitors like Grofers and Dunzo, managed to establish customer loyalty through disciplined execution.
The trend indicates that early entrants tend to allocate resources toward market education, whereas late entrants leverage validated demand, learn from the mistakes of their predecessors, and use their capital more effectively. In dynamic markets, success often favors those who arrive fully prepared rather than those who arrive first.
(The author is a serial entrepreneur and best-selling author of “Failing to Succeed”; follow him on X @vaitheek.)
Published on November 24, 2025.
