Entrepreneurship First and Second Movers
In business, a first mover the first company to come up with a new idea, isn’t always the most successful. I’m Jim Metzner and this is the Pulse of the Planet.
Junkunc: Although a first mover can have an advantage for a period of time, if they don’t execute really well, then a second mover, or an imitator, is going to come in, and basically take away that market, because they’ve been able to learn from the first mover, and improve upon the first mover.
Marc Junkunc is Academic Director for the Apex Systems Center for Innovation and Entrepreneurship at Virginia Tech.
Junkunc: Bill Gates was doing work for IBM. IBM was an early mover in the hardware of computers, but Gates was working on the software. What Bill Gates was able to notice was that it was the software that was most powerful, not the hardware. IBM continued to develop their hardware and sell computers, and be innovators in that business, but Bill Gates was able to take the software piece and created one of the most valuable companies in the history of the world. It really leveraged the insight that Gates had and the specialized knowledge that he had about the power of the software, that even IBM didn’t understand at the time. In effect, IBM gave away that market.
A comfortable incumbent, they start to not see the next step in innovation, and partly because it’s a larger company, and it’s less nimble, and they don’t want to cannibalize their own efforts, they don’t want to disrupt their own current business. They often will get disrupted by another startup. You can say IBM missed out on Microsoft. Microsoft missed out on Apple. They all missed out on Google. Google missed out on Facebook. It happens over and over again.
More on entrepreneurship in future programs. I’m Jim Metzner and this is the Pulse of the Planet.