links for 2010-10-08

  • First-Mover Advantage is an idea that just won’t die. I hear it from every class of students, and each time I try to put a stake through its heart. Here’s one more attempt in trying to explain why confusing testosterone with strategy is a bad idea. First mover advantage – great bad idea. The phrase “first mover advantage” was first popularized in a 1988 paper by a Stanford Business School professor, David Montgomery, and his co-author, Marvin Lieberman.[1] This one phrase became the theoretical underpinning of the out-of-control spending of startups during the dot-com bubble. Over time the idea that winners in new markets are the ones who have been the first (not just early) entrants into their categories became unchallenged conventional wisdom in Silicon Valley. The only problem is that it’s simply not true.

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