FMA = First Mover Advantage

Definition:

Ever heard how the early bird gets the worm? Well, there's a lot of truth to that saying. There's a market principle derived from game theory called First-Mover Advantage (FMA), in which a company enjoys a strategic competitive edge by occupying a space in the market before anyone else, allowing them to capture and solidify a majority of market share.

What are the advantages of being a first mover?

There are several significant advantages that a business can enjoy by being first on the scene with a new product, service, or innovation:

• Defining industry standards
• Wide access to suppliers
• High brand recognition
• High switching costs for consumers
• Good relationships with retailers
• Economies of scale

Who introduced first-mover advantage?

In the B2B SaaS space, a great example to look at is Slack. Video game developer Tiny Speck created a corporate messenger platform so its remote team, spread across the United States, could enjoy immediate communication with robust sharing functionality. Realizing the video game wouldn’t take off, they switched their focus to the messaging platform they’d built and, in five years, had a $17 billion company and, thanks to their first-mover timing, dominated the category.