Supplement Industry First-Mover Advantage is a Mirage
The first significant business to serve an uncontested market has an advantage over competitors coming into the space at a later stage, right? If you’ve read the famous business book Blue Ocean Strategy, it essentially focuses on the first-mover advantage and how it allows you to build brand ubiquity and loyalty before everyone else. While there are many strategy games (or consumer marketplaces) where the player who goes first has a greater likelihood of winning than their opponent…the supplement industry is no longer an example of one!
Supplement Industry First-Mover Advantage Fallacy
“Pioneers get slaughtered, and settlers prosper…”
This has been supported by data for 3+ decades! A landmark study showed that 92 percent of fast followers, that took control of a pioneer product’s market share, end up having more long-term success.
In today’s supplement industry, low barriers to entry basically take away any meaningful advantage of being first to market. If you launch a “great product” in a new category or innovative format, it simply means that a dozen other copycats will quickly launch after you show a slight bit of success.
First-Mover “Liability”
The fast follower advantage is further supported by the law of Diffusion of Innovation, which states a new idea needs time to spread through a social system before it can reach peak adoption rate. Moreover, being first is expensive in that “early innovators” phase of building the market. Trying to sell functional CPG products to people having no previous point of comparative reference, or worse…not understanding the problem you’re trying to solve, will mandate you to spend time, money, and effort to educate the market. That time spent on educative efforts could end up working against you, as it’s easier to sell into a well-informed market than to build one from scratch. You’ve made their life easier.
Learn From the Competition
The supplement industry isn’t dominated by those who got there first, but whichever brand is first to best meet the needs of the customer. In an evolving market, it’s critical to accept those customer needs may be unclear today, but will quickly evolve and solidify over time.
“The early bird may catch the worm. But it’s the second mouse that gets the cheese.”
Instead of constantly looking for new market opportunities, perhaps a more successful path forward focuses on better understanding the pain points of your customers and offering them a better product in the space you already occupy.
More Than a “Great Product”
“It’s what you build off that great product that determines the long-term winners.”
Your great product is only the entry fee to compete. So, what’s actually going to create a competitive advantage that will be difficult to catch over time?
Building a high-functioning flywheel that combines:
great products with strong demand signals
message-market fit (i.e. strategic narrative)
business model innovation
community-centric data insights