Is the first to market the first to fail? Empirical evidence for industrial goods businesses

When entering a new market, the first entrant typically faces the greatest market and technological uncertainties. Memorable phrases reflect the associated survival risk, such as "the first to market is the first to fail" and "the pioneer is the one with the arrows in its back." Although research estimates the market pioneer's survival rate, the typical pioneer survival rate has not been compared with that of early followers. The authors' study compares survival rates for 167 first-entrant market pioneers versus 267 early followers. For these industrial goods businesses, 66% of the pioneers versus 48% of the early followers survived at least ten years. The main conclusion is that the pioneer's temporary monopoly over the early followers plus its first-mover advantages typically offset the survival risks associated with market and technological uncertainties. These results are consistent with previous research in the sense that first-mover advantages that increase a pioneer's market share also help protect the pioneer from outright failure.