There’s no such thing as ‘first mover advantage’
Never include ‘First Mover Advantage’ in a pitch deck
Getting a head start is an advantage in a race, perhaps - but building a startup is a different kind of race.
If you are a 400 meter runner, it stands to reason that if you were able to start 2 seconds before everyone else, you’d have a much better chance at winning the race. Startups are not 400 meter races - and being the first mover is anything but an advantage.
Let’s get one thing straight: there’s no such thing as first mover advantage. It’s a myth—a buzzword that sounds impressive but doesn’t hold up in the real world. Yet, time and time again, founders tout it proudly on their pitch decks like it’s a golden ticket to success. Spoiler alert: it’s not. In fact, claiming first mover advantage can actively hurt your credibility with investors. Here’s why being first to market is more of a disadvantage than an edge, and why you should never include it in your pitch deck.
There’s no such thing as first mover advantage⬤
Founders often assume that being the first company to a market or category is an inherent advantage. The theory goes like this: by being the first, you can capture market share, build brand recognition, and get ahead of any potential competition. It sounds compelling on paper, but the reality doesn’t support it. Historically, the companies that dominate industries today were not the first movers.
Take Google, for example. It wasn’t the first search engine—Yahoo! and AltaVista were. But Google improved on existing models and focused on what really mattered: better search results and a cleaner user experience. The same goes for Facebook, which wasn’t the first social network. MySpace and Friendster were the early birds, but Facebook refined the social networking experience and scaled to unimaginable heights.
This pattern isn’t a fluke. It’s a trend: being the first to market rarely guarantees long-term success. Instead, it often paves the way for someone else to swoop in, fix your mistakes, and dominate the space.
First to market is a disadvantage
Let’s talk about why being first can be a serious disadvantage. The startup that breaks new ground has the unenviable task of educating the market, solving unforeseen problems, and absorbing all the growing pains of building something from scratch. While the first mover is busy figuring out what works, everyone else is watching, learning, and preparing to do it better.
Here’s what late entrants can leverage to their advantage:
They can learn from your mistakes
When you’re first, you get the dubious honor of being the guinea pig. Every misstep, every product flaw, and every marketing fail happens in the spotlight. Your competitors, meanwhile, get to study what you did wrong and avoid the same pitfalls.
Latecomers can create superior versions of the product by addressing the weaknesses that plagued the original. They have the luxury of time to understand what users didn’t like about the first mover’s offering, refine the experience, and launch something better.
They can evolve from your product
Building a product from scratch is time-consuming and costly. The first mover often has to make compromises to get the product to market quickly. However, the second or third company to enter the market can take their time, iterating on the original concept and creating a more polished version.
For instance, Facebook didn’t need to invent social networking—they just needed to make it better. By focusing on an improved user experience, cleaner design, and more scalable features, Facebook didn’t just beat MySpace—it obliterated it.
They can
Because the first mover bears the brunt of the research and development costs, they’re often locked into high expenses just to get their product off the ground. They invest heavily in educating the market, building out infrastructure, and ironing out inefficiencies.
By the time a competitor enters the scene, they can streamline production, refine processes, and bring a similar (or better) product to market at a much lower cost. This allows them to offer a product at a more competitive price point or to achieve higher profit margins. Essentially, the first mover has done all the heavy lifting, and the second mover gets to reap the rewards.
They can use timing to their advantage
Timing in the market is crucial—and being too early can be just as detrimental as being too late. The first mover is often ahead of their time, launching a product when the market isn’t fully ready. They end up spending precious resources trying to convince consumers they need the product.
By contrast, late movers can enter the market at the right time, when consumers are more educated and demand is clearer. They can ride the wave of public awareness created by the first mover and take the market by storm when the timing is optimal.
Investors aren’t impressed by your first mover advantage
Including “first mover advantage” in your pitch deck is like waving a red flag in front of experienced investors. They’ve seen it all before—and they know that being first rarely leads to market dominance. When they see “first mover advantage,” they’re likely thinking, “Okay, great. But what happens when someone else comes along and does it better?”
Investors want to know how your company is defensible—how you’re going to protect your business from competitors who inevitably will come after you. Are you relying on strong intellectual property? Have you built a product with network effects? Do you have an unbeatable team with deep domain expertise? If all you’ve got is “first mover advantage,” you’re not giving investors enough reason to believe in your long-term success.
Build a real moat.
Instead of boasting about first mover advantage, focus on real defensibility. Here are a few elements that can create a strong moat around your business:
Patents and IP: Intellectual property that legally prevents competitors from copying your technology or product.
Deep Domain Expertise: If you or your team have decades of experience in a niche field, that’s a significant advantage. Competitors can’t simply hire expertise overnight.
Regulatory Compliance: In industries like healthcare, finance, or food, having a strong grasp of compliance and having met regulatory hurdles can create barriers for new entrants.
Customer Loyalty and Network Effects: If your business thrives on network effects—where each additional customer makes the service better—you’ve got a moat that’s tough for competitors to break.
The Bottom Line
Being first to market isn’t an advantage; it’s often a liability. Instead of touting your first mover status, focus on what really matters: how your business is going to stand up to the competition and thrive long-term. Investors don’t care if you were first—they care if you’ll be the last one standing.
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