Do you believe that people who come up with a good idea first and bring it to market have an advantage? It makes sense, doesn’t it? I was surprised to learn that in most instances, that is not the case. To clarify, Pioneers are the first movers in a given market and Settlers are those that come into a market that someone else has started.
According to Adam Grant, the author of Originals, failure rates for Pioneers are 47 percent compared to 8 percent for Settlers. At first glance, this doesn’t seem right to us. The reason for this is that we can all think of Pioneers that have succeeded because the ones that failed are long forgotten.
One example given of this dynamic has to do with the Home Video Game industry. Magnavox was the Pioneer in this market in 1972 with the debut of the Odyssey. A settler by the name of Nintendo acquired “distribution rights for Japan in 1975, and then blew Magnavox out of the water.”
A few reasons why settlers very often win out. They wait until they are ready to introduce something new, when they do, they revolutionize the product or industry. The pioneers have solved the major problems (by solving for all their failures) with the idea so the Settlers can now devote their time and energy on improving their offer. Settlers also enter the market knowing the market is ready and the technology is available because it has been proven by someone else.
There are industries where their is a ‘first-mover’ advantage. Usually these are special cases where infrastructure or customer loyalty was slowly built up over time. This is more the exception, not the rule. If you have an idea and you see it already being done, consider this as proof that their is a market for it. All you have to do now in learn from the first movers and improve on your service or product.