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Comment by tyohn | Hacker News Reader

The early worm gets eaten by the bird! First is great if you're first in the mind of the consumer but if you're not the first to gain traction (in the web world = users) in enough people's minds - there's no advantage to being first. It's quite possible your being first might pave the way for later arrivals to dominate the market you created.

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Not exactly There is often a sustainable advantage in being the "first-mover" in the competitive marketplace. Combine that with a strong brand name, (for example: Twitter) and being the first to market can be a huge asset. After all, if you've "pave(d) the way for later arrivals," you'll at least know which paths led to dead ends. Your competitors won't. Besides, later arrivals will also be "behind" in the respect that they won't have had as much time to learn from mistakes. In the hyper-competitive world of the web, it's actually pretty easy to use the first-mover advantage to the detriment of potential future competitors.

For example, a business like eBay has fees which are ludicrous, an interface that is not at all intuitive, but because it was pretty much the first established brand in online auctions, it's what most people keep using.

You hit the nail on the head > first established brand...

An "established brand" did get into the mind first... - you might possibly gain ground on them (eBay) by focusing on a unique segment (Esty) or a host of other ways. Getting established is the hard part - being first is not a guarantee you'll end up being the "established brand". Was Facebook the first social site? And while a strong brand name is great to have - easier to remember and easier to market - its still nothing compared to getting critical mass.

First mover is a huge advantage if you manage to create a new segment and then spend all your time focusing on promoting how great the segment is - and hopefully at the same time gaining critical mass.

I'm not convinced. For every example you do cite of a first mover advantage, there are a dozen examples of first movers being killed by companies that followed them.

Yahoo-Google

Friendster-Myspace-Facebook

Blogger-Wordpress

Hotmail-Yahoo-Gmail

I can go on.

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