Take note, innovators: Early action secures market share and customer loyalty.

getty

There has always been a compelling desire to be first. We shower praise and adulation upon gold medalists at the Olympics, even when the difference between them and the person who took silver could only be a fraction of a second. In the movie “Talladega Nights”, NASCAR driver Ricky Bobby’s mantra is “If you’re not first, you’re last.”

In business, innovation is often described as a race. The finish line is not simply launching a new idea, but reshaping markets, creating new demand and sustaining competitive advantage. The runners in this race — the entrepreneurs, teams and organizations — face a pivotal choice: move first or move later.

While fast followers sometimes reap rewards, the arc of innovation increasingly bends toward those who move first. First movers — individuals and companies who act quickly on emerging opportunities — are uniquely positioned to set the terms of competition, capture disproportionate mindshare and establish ecosystems that others must navigate.

Why First Movers Win

First movers enjoy a series of compounding advantages:

1. Defining the narrative. When OpenAI launched ChatGPT in late 2022, it did not just release a product. OpenAI defined the public imagination of generative AI. Competitors from Anthropic to Google scrambled to follow, but OpenAI had already secured cultural and business primacy. Being first means telling the story before anyone else does.
2. Shaping customer behavior. Consider how Tesla transformed electric vehicles from fringe experiments into mainstream aspirations. By acting early and committing deeply to EVs, Tesla reshaped what customers expect from cars: long-range batteries, over-the-air software updates and sleek designs. Rivals are now forced to compete on Tesla’s terms.
3. Establishing ecosystems. Apple’s first-mover advantage with the App Store created an enduring developer ecosystem. Once developers invested time and resources into Apple’s platform, the flywheel of innovation locked in, giving Apple durable competitive strength.
4. Creating switching costs. Enterprise software firms like Salesforce have long benefited from first-mover adoption. Early customers integrate deeply, train staff and build processes around the product. The cost of switching later becomes prohibitively high, protecting the first mover’s position.
5. Building a moat against competitors. Beyond switching costs, first movers can create structural barriers that make imitation difficult. Amazon’s early investments in logistics and fulfillment centers gave it an infrastructure advantage that rivals still struggle to match. Similarly, Nvidia’s years of developing specialized GPUs and cultivating a developer ecosystem around CUDA created a technological and talent moat that keeps competitors at bay. These moats ensure that even when competitors arrive, they face an uphill battle to replicate the depth, scale and stickiness of the first mover’s position.

Finding The Blue Ocean Opportunities

One of the historical reasons why first movers often win out in innovation comes from the blue ocean strategy. The blue ocean approach focuses on differentiation such that innovators find uncontested market spaces rich with opportunity. Generally, this does not occur by creating something entirely new and different. Instead, it happens when a company alters its industry’s perceived boundaries to stake a claim in a potentially lucrative market.

For example, an article for International Business Times highlights how Dimov Tax was able to quickly scale its tax and accounting services for individuals with complex tax situations. With a hybrid-based setup that combined Big Four accounting precision and boutique-level customer support, Dimov sensed a “blue ocean opportunity” where he could offer something with broad appeal that was not currently available in the market.

Essentially, higher-income taxpayers were too small for the Big Four, but too complex for small local firms preparing everyday returns. Additionally, securing tax planning for these types of affluent clients was equally challenging. The wave of demand that Dimov experienced by focusing on this underserved audience resulted in his hiring multiple employees within weeks of opening.

Video game manufacturer Nintendo has notably implemented the blue ocean strategy twice with its Wii and Switch systems. In the early 2000s, Nintendo’s Wii targeted non-gamers with its unique motion controls, creating a new audience that resulted in its best-selling console at that time. Then, the company went the blue ocean route again with the Switch, creating a combined portable/home console that even outdid the Wii by creating a unique value proposition.

Finding new audiences can also be far more cost-effective than fighting over the same audiences as your competitors, enabling faster and more sustainable growth.

Brand Recognition And Market Share

In part because innovation tends to reveal blue ocean marketplaces, first-movers gain a massive head start through their early opportunity to build brand recognition and capture the market.

Nintendo’s previously mentioned Switch system is an excellent example of this principle in action. In the wake of the Switch’s massive success, a wave of handheld PCs has flooded the market in hopes of capturing similar success. A recent analysis found, however, that the combined total sales of these competitors were a paltry 6 million, compared to over 150 million for the Switch.

Brand recognition and early market capture tend to have snowball effects, leading to lasting loyalty even as new competitors enter. This also gives first movers more power to set their prices in a way that results in higher profit margins.

As new competitors enter the market, they inevitably must fight against the established reputation and market share of the first mover. It is an uphill battle that few master. For example, in the ride-share industry, Uber maintains roughly 76% of total sales. Its top competitor, Lyft, arrived on the scene three years after Uber. Clearly, those three years were enough to cement Uber’s place as the market leader.

The Long-Term Payoff

Innovation rewards those who do not wait for perfect clarity. The act of moving first, of daring to step into uncertainty, creates its own momentum. Moving first requires individuals who take small but bold steps, teams that build quickly and learn relentlessly and organizations that commit to shaping rather than reacting to markets.

While first movers shoulder risks, the long-term benefits often outweigh them — including:

• Lock in customer loyalty.
• Define categories for years, sometimes decades.
• Attract talent drawn to bold missions.
• Create enduring ecosystems that multiply returns.

As the pace of change accelerates daily amid shifting customer expectations, hesitation often carries more risk than action. First movers may stumble, but the advantage leans decisively toward those willing to act boldly and early.