Being a pioneer doesn't always guarantee happy trails.
You're starting a business and you believe that you have to be first to market to secure your long-term profitability. But does first always mean best? Not necessarily, according to a joint study by Duke University in Durham, North Carolina, and INSEAD, a business school in Fontainebleau, France.
Of course, while there are certain advantages in being first to market, there are disadvantages, too-such as the increased cost of being first, which doesn't necessarily translate to long-term profitability. In fact, second-to-market businesses and other followers can also reap some benefits by learning from the first mover's initial mistakes, then incorporating changes into the company's business plan appropriately.
According to Bill Boulding, professor of business administration at Duke University and co-author of the study, business owners should consider whether their long-term profitability will increase significantly by being the first business on the block. "I think the overriding conclusion from this research is that it's dangerous simply to think you have a first-mover advantage and that 'I'm first, therefore I'm going to do better,' " Boulding says. "It's just not enough to be first; you need to be first with some kind of additional protection [and] some kind of sustainable advantage, [such as] a patent on [your] product." If you'd like to read the entire study, visit http://ged.insead.fr/fichiersti/inseadwp2001/2001-03.pdf.
- Endangered Species Chocolate Co.
(541) 535-2170, www.chocolatebar.com
- Fuqua School of Business, Duke University
- Wildlife Works
(888) 934-WILD, www.wildlife-works.com.