First mover advantage

During my career I met many Venture Capital companies and defended our business case. It is perfectly allright to have an ambitious goal but it should be realistic and achievable.

One of the things I don't buy is the existence of something labeled as first mover advantage. To me the exact opposite is true.

First, if you come up with a reasonable business case you get copied instantly - talk to software producers in the b2c market - their software get's hacked before it is on the shelf for purchase.

Second, if it is really a paradigm shift the time the market needs to adopt is killing all your ambitions. You simply have to educate a market first - most of your sales money is spent on educating people - I was on this sales calls frequently, I know exactly how frustrating that is.

We've been on the forefront in the database market in the early nineties, when the market finally was ready to consume more licenses - 10 years later and thanks to Bill Joy and his JAVA Project - our investors lost trust and interest in our business model. By that time many companies were trying to win the same business - in nature all similar. What happens at the end, we all ended-up with a fraction of the market and the old Technology still prevailed.

I recently found a great speech by Andreas von Bechtolsheim he recently gave at Stanford, where he exactly shared my point on first mover.

The examples he gave are compelling

- Google search engine
- Facebook

Allthough great companies but no-one qualifies as first mover.

Same story all the time - people want you to buy Global Trends and invest in a couple of valid ideas but the truth is that you need deep pockets if you bet on Global Trends or paradigm shifts. Look at my favorite character at the Big Short Movie - Dr. Michael Burry - he was right at the end and it paid off - but the investors backing his idea had a significant drawdown and might withdraw funds forcing you to give up on the bet.

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