Lately I've been hearing a ton of people talk about this thing called the first to market advantage. The idea goes that if you're working on a product and your competitor is working on a competing product, a significant market advantage will go to the one who releases their product first, since by the time the second company releases their product to market, many of their prospective customers may have already purchased the product from the first company. In theory the argument sounds reasonable, but its effects have been wildly overstated in such industries as computer software and consumer electronics. Those who espouse the first-to-market doctrine would have you believe that once one company has captured a certain percentage of the market share, it would be nearly impossible for that company to lose ground to a competitor. They say that Windows tablets are simply too late to market and that everyone who wants a tablet already has an apple or android tablet. But history will show us that the technology industry is full of dramatic turnovers and surprising upheavals.
If first-to-market advantage really had as strong of an effect as some say, maybe we'd all still all be using the Xerox Star (since it was, in fact, the first computer to incorporate a windowed graphical user interface), and maybe we'd still all be using MySpace instead of Facebook. You might say that Google+ will never take over Facebook as the #1 social media service since Facbook has already captured some 800 million active users, this view underestimates a wealth of other factors that come into play. Most notably, Facebook has reached a point where it doesn't have many more prospective users. It can't grow its market share much more, so the only way to continue to grow in revenue is to find new ways to monetize its current user base. This means more advertising, targeted ads, paid content, and potentially more questionable use of its one main asset, your personal information. These kinds of changes could easily motivate current Facebook users to jump ship and go somewhere else.
History is full of other market share upheavals. Microsoft and Nokia had touch-screen smart phones long before iOS and Android ever made it into the picture. So iPhone didn't gain market share because they were the first to do something that no one else had done. Microsoft's Xbox was generations late to the video game console platform market share war, and naysayers in 2001 said it would never gain traction in the market against Sony and Nintendo, as even the established Sega was beginning to lose the market with its Dreamcast. But only a platform generation later, Xbox is now the best-selling video game platform of all time. Even the runner up Sony's Playstation is relatively new to the console industry, and long time players Nintendo and Sega are struggling to stay relevant in a changing market.
The main point here is that first-to-market advantage is only one of many things that factor into success in the marketplace, and its role is vastly overstated. The main reason is that new products are always coming out. In a sense, there's no way of being first to the market when new technology is coming out. Maybe Amazon releases the first good 7-inch $200 tablet, but 6-months later, the game has already changed, and Google is releasing a 7-inch $200 tablet that blows Kindle Fire out of the water. When the typical smart phone user gets a new phone every two years, each release is a chance to gain market share back. If your competitor was the first to provide 4G, maybe you can be the first to provide NFC, or 1080p, or hands free, or mind control, or whatever. When there's always new features to provide and old ones to improve, the question of who made it to market first gets a little fuzzy.
There's a lot of talk about how late is too late in terms of releasing a product to an established market. It only takes a look at the past to see that if you can provide a high quality product and convince your prospective customers that you're worth the price you're asking, there's no such thing as too late.
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