What Is A First Mover Advantage Definition?
The First-Mover Advantage (or FMA) of a firm/institution is when it introduces an exclusive service or product, gaining an advantage over competitors. This is the competitive benefit gained by becoming the earliest to enter the market zone and develop consumer loyalty and brand recognition even ahead of the competitors in the respective sector. In this way, the organization usually attains loyalty and brand leadership. However, they ought to keep adapting to escape the obscurity caused by their competitors. By making a first move in the market is the best hope since the success is heavily reliant on the reputation and recognition.
First-Mover Advantage and Challenges Around It
In an industry, first movers are trailed all the time by challengers that endeavor to leverage the first mover’s success and have a market share. Most of the time, a considerable market share is possessed by the first mover and a substantial consumer base.
The crypto world is always a center of technological advancement and creativity. There is a considerable advantage in the blockchain space since there are limited consumers and developers in the case of crypto exchanges or blockchain projects. Taking their initial step into the market counts as their paramount expectation as their achievement is greatly dependent on the recognition and reputation they possess in the market.
Shifting from one cryptocurrency network to another undergoes transaction fees and likely hazards. This might point toward one among several reasons behind the hesitancy of the customers to migrate from the existing exchange with which they are dealing toward the other one which is freshly developed, even if it offers more efficient and effective services. Substantial struggle, as well as a considerable time, is the requirements for the successive comers to win the hearts of the existing consumers so that they would think it suitable for themselves to be a part of some unique platform.
Ways to Become a First Mover
There are three top ways to be a first mover. 1st among them is to have a technological benefit compared to the competitors. There is sufficient time for the first movers versus late comers to develop a technical proficiency as they begin earlier. The 2nd mode is to stop the successors from reaching the rare assets like constructing scarce digital assets through blockchain technology, appointing an expert team, or acquiring critical suppliers. Whereas the 3rd refers to establishing a primary consumer base; hence, they would think it burdensome or expensive to shift to the later challengers for their services.
Launching a brand new product to become standard in the industry is hugely beneficial, as is the case with Bitcoin (BTC) in the world of cryptocurrencies – having the advantage of being the earliest to develop blockchain technology and the initial cryptocurrency. Nevertheless, there remains a need to be capable of persuading enough consumers in the first place to make a remarkable impact, paving the way toward loyalty and brand awareness. The other related things take into account the detection of a strategic zone to manage resources and establishing a first-class collaboration with primary suppliers. Another service platform enjoying first mover status include Ethereum, which pioneered smart contracting, and Chainlink, the first to link dApps with verifiable real-world data.