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How The Second Mover Advantage Can Make You More Successful In Business

Major Points of the Article

  • First movers usually require a lot of time, money, development, and education as no one like them has existed before.

  • Second movers can be more successful as they can take advantage of what was learned from the first mover.

  • Customer adoption and profitability can be higher for the second mover because they are a less risky venture.

New businesses appear and disappear all the time, however, the success of that business will usually depend on a lot of key factors. In particular, is it the first mover, second mover, or one of many?

What Is A First Mover?

A first mover refers to a business entity that is the first to introduce a product or service to the market. This often creates what is called the first mover advantage. And, if that is you, then you will be able to create strong brand recognition and product service loyalty before your competitors enter the market.

Today, first movers are generally considered global due to the internet and worldwide delivery potential. However, in some instances, you can be the first mover if the product or service is limited by geographical constraints and you are introducing it to a foreign market.

As for the product or service being introduced, it is usually quite unique, innovative, or addresses a problem that has never been addressed before. This usually means the market requires education and the adoption can be slow, which represents a huge risk for the first mover.

What Is A Second Mover?

Now a second mover is essentially that, the second to introduce a product or service to the market. These businesses usually have greater success because the local market is already aware of what the product or service does from the first mover. Usually, the risk is much lower as the first mover has already educated the market for you, and all you have to do is have a better offer than them.

One Of Many Mover

As for the "one of many mover", these are usually late entrants (third, fourth, tenth, etc...) who can have success but typically it will not be as high as the second, or even sometimes the first mover. This means they will have limited market share penetration and could always be a small player.

second mover advantage and why it is better in business

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How Does A First Mover Compare To A Second Mover?

There are five key areas that are different between the first and second mover.

  1. Product/Service Development As the first mover, you will be introducing a new product or service to the market. However, because it is the first, there is nowhere you can learn from. Essentially, there is little to no industry guidance and you will spend a lot of time and money on the development. As the second mover, you will already have the data and failed knowledge from the first mover. This is why it is less risky to be the second mover, as the first mover would have shown you what to do and what not to do.

  2. Customer Acquisition As a first mover, you will have to educate the consumers about the new product or service. This means you will have to spend a tonne of money and time working out what marketing tactics, what copy, what graphics, sales processes, and more are needed in order to make a sale. This may sound easy for some, but when addressing the market, a new product or service is viewed as scary by the customer... Essentially, customers are risk-averse and will likely not take action on the problem you are trying to fix - making customer adoption slow. As a second mover, you will reap all the benefits from the first mover. They have educated the market for you, and the customers will know what you do. Then all you have to do is have a better offer that will encourage the customer to leave the first mover (i.e. disrupt the customer's loyalty).

  3. Investment & Investors Depending on whether you are the first or second mover will depend on how much money you will likely need to make the business grow. As a first mover, there is a huge amount of risk as a lot of money will be spent on development and educating the market. Not only that the appeal to investors is quite low as there is no evidence of success that the business will work. As the second mover, it will be easier for you to attract investment as a viable business has already been shown by the first mover. Plus you potentially will be more profitable creating a greater return for your investors.

  4. Pricing As the first mover, you would have spent a tonne of money on development and education, meaning you will be chasing that spent money to create a large return for your investors. In order to create that large return, you will have to charge a premium for the product or service. As the second mover, you would have needed less money to get off the ground because you didn't need to spend so much on development and education. For that reason, you will not be chasing such a high return so quickly and could charge a lower price than the first mover. And, as a bonus, charging a lower price can help increase your customer adoption as customers leave the first mover for a better deal. Another item to note is as the second mover typically you will have a higher profit margin as less was spent on development and customer acquisition.

  5. Innovation Being the first, or second mover means there was some level of innovation involved. As the first mover, your level of innovation is quite high and novel, whereas as the second mover, your innovation is about the novelty and how it was improved.

Why Is It Better To Be A Second Mover?

Reading above, you would quite clearly see that being the second mover is better for many reasons such as:

  • you don't need to educate the market

  • there are customers you can take from the first mover

  • customer acquisition is easier

  • you know what to do and what not to do

  • you require less money to get started

  • the profit margins can be higher

  • investors who missed the first mover, want to invest in the less risky second

  • and more...

And, we have seen many examples of this throughout the recent decades such as:

  • first mover Myspace (hard to code), second mover Facebook (they coded it for you)

  • first mover Yahoo (busy), second mover Google (simple and easy to use)

  • first mover Jasper (expensive), second mover ChatGPT (free)

  • and more...

What Should You Do Next?

A key element in business is that you should be always looking at ways to grow your revenue and your business. Which means taking action on ventures that can scale what you already do or diversify into complementary products or services. However, if you don't have time, don't let your business suffer - outsource it. That is where Paradelta Strategy can help, as they create short and long-term plans, to then assist you with its implementation. As a plus, we usually find up to 8% in savings that can be used in other areas to grow your business such as funding for a second mover advantage.

In fact, over the years, Paradelta Strategy has helped businesses across Australia to grow and expand, nationally and internationally, and grow significantly in profits. To get assistance with your business, simply email us at or schedule a no-obligation discovery call here.

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