First Mover Advantage and the Web

Most people think first-mover advantage is essential on the web. Stories of eBay, Amazon, and Yahoo tell of underdog organizations transitioning from basements and garages to web dominance. But take a look a little closer and you can see that eBay’s sales are essentially flat, Amazon is struggling to maintain profitability, and the titan of web properties - the de facto #1 site on the internet - is opening itself up to a proxy battle!

First movers on the web do have a distinct advantage, but what we’re seeing in the 15-year-old web is that those first movers are still every bit as vulnerable today as they were in day one. This is the “mature” web, where brand loyalties have been established, terms like google are both nouns and verbs, and small competitors - in quantity - can add up to big challenges. Looking forward a further 15 years, will these original powerhouses still hold their ground?

Consider, of course, the story of the social networking world. There was Friendster.com - the first real company on the social networking scene. They became a major player in early 2003. Followed shortly thereafter we see Myspace.com, which emerged in 2004. 2 years after them, suddenly the social networking market has shifted to Facebook.com. Will anyone be surprised if a new social network platform emerges in another year? So far - between Friendster, Myspace, and Facebook, each has enjoyed about a 2 year head start on the next one, and as the next rises, there does seem to be some stagnation at the first-mover.

Look also at Plaxo versus Linkedin. I’m a huge fan of Linkedin for social networking, but very few people recognize Plaxo, which was on the business social networking scene years before LinkedIn was a serious contender.

What we’re watching today, and will watch in the next half-life of the web, is that first movers must manage exceptionally complex competitive markets - of the likes that have never been seen before. Even the almighty Google itself has to recognize their product (contextual search) will be outmoded - to an extent - by the coming of age of smarter search engine systems and intelligent filters. Will keyword advertising survive another decade? The obvious challenge for Google is to recognize that their solution (which is, in all honesty, the best anyone’s come up with - Yahoo, Live.com, MSN, and Ask.com alike) is only one way to organize the web’s vast wasteland of information. New first-movers (and responsive, small-scale reactionary/niche-filling businesses) are already operating slimmer and more savvy than ever before.