This week’s podcast is on Tesla vs. Nio and why first mover advantage is not as awesome as everyone thinks. At least not in tech.
Advantages of first mover in tech can include:
- Bigger advantages:
- Temporary supply-demand imbalance
- Increasing returns to scale
- Switching costs
- Network effects
- Learning effects
- Smaller advantages:
- Brand loyalty
- Technological leadership
- Scarce assets in tech
Disadvantages of first mover in tech can include:
- High failure rate
- R&D expenses on successful and unsuccessful tech.
- Cost of building production processes and complementary goods not available in the market
- Cost and difficulty of developing suppliers and distribution channels.
- Cost and difficulty of building consumer awareness and education
- Availability of enabling technologies and infrastructure
- Uncertainty of customer requirements
Related podcasts and articles:
Concepts for this class.
- Increasing Returns to Tech Adoption
- First Mover Advantages and Disadvantages.
- Path Dependency
- Resource Based Competition
- Core Competency
- Supply-Demand Imbalance
Companies for this class:
- #32: Innovation, Adaptation and Resilience as Competitive Strategy
I write, speak and consult about digital strategy and transformation.
My book Moats and Marathons details how to measure competitive advantage in digital businesses.
I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.