First-mover (dis)advantage

Submitted by luxian on Tue, 08/29/2017 - 12:23

Most people know about first-mover advantage, but a few know that it might also be a disadvantage. When the business relies on technology you may end up outdated pretty fast unless you invest heavily in technology or be lucky/smart enough to bet on the winning technological approach (most of the cases you are not).

A few examples come into my mind. First, road tax. Most developed countries from western Europe use stickers applied on the windshield for verification. Some have automatic cameras to check them, others still rely on random human inspection. Eastern European countries introduced road tax years later -- and because the technology was available and (most probably) cheaper they use a completely electronic system. You don't get a sticker - they scan your license plate instead. They are easier to buy online and more flexible. For the countries that already have stickers it might not be economical feasible to update their system, so they might end up waiting years before upgrading.

Another example is the internet infrastructure. Western countries had cooper wires from the 50s already in place and they used that. The cost to upgrade to fiber optics is harder to justify when you already have a working system. Poorer countries didn't have cooper wires everywhere or they were in pretty bad shape. When they decided to get online - fiber optic was already available and they started with that directly. That's why some underdeveloped countries have better Internet connection.

These are the stories that come in to my mind whenever I think about upgrading my 6 years old PC. I try to postpone the move as much as possible just to make the jump in performance as big as possible to better justify the cost and also to avoid being one of the first generation users of Intel i9 or Ryzen Threadripper.

 

 

 

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