Being first is not a guarantee for success, that’s for sure. But it gives you an opportunity to make your mark and cease a large marketshare before other companies establish themselves

Success in business depends on so many factors. Being first is one of thousands.

You mention that the big guys have fierce competition. But most of them have it now when they are big and have equal resources to mount an effective competing strategy.

Starting very late in the game will work for a company if it focuses on a different strategy. Wordpress, the example you gave is an excellent case of focusing on an another type of element.

While Blogger, Movable Type/Typepad were proprietary, WP was developed by the open-source community. Thus it was different and got noticed.

I won’t go on and on as I did in the first comment but there’s no straight rule to succeed in business. Everything depends on the circumstances, the players involved, the time and other factors.

Big guys should be respected but not necessarily feared to the point of surrender. However, when they take a direct aim at you, it’s wise to have a powerful defensive strategy if they attack before you’ve had a chance to consolidate your place in the marketplace.

I totally agree with your view that big guys can possibly blow the startup out, particularly if the startup is not prepared or still ramping up. But, it took me by total surprise that startups are surprised and panicking when they hear about it.

In today’s world, big and small companies alike and 100s of venture capitalists, and probably 1000s of entrepreneurs are relentlessly crawling the web, to see if there is any opportunity. So even if you are a first mover, the moment you bring up your application to the world, expect that some one started building a similar or for that matter a better copy of your application. If that guy has a better or bigger marketing or distribution strategy, it would be a tough battle to fight it out. Even if some one starts later in the stage, that would still be a great threat. Take wordpress.com blogs for example. They started very late in the game, but are picking up cherrys with ease. And Google is not the first search engine.

So first mover advantage alone will not be able to rescue, we need some thing more. A more competent and focused approach of improvements to grow bigger along the way. Google is not the first search engine.

Regarding competition faced by today’s big guys, obviously the challenges were different. May be quite low in number too relatively. But I can not agree that they did not have fierce and threatening competition and challenges. At one point of time, Linux was expected to kill some big guy, MS. People thought entire world is against Microsoft for a while. And the Rest is history. Except browser, it doesn’t seem it did anything. Along the way, other companies killed themselves. (Solaris,HPUnix…) Even when Google was about to gain momentum, Yahoo and Microsoft the then big guys started off in a big time. But Google steered out of it and emerged as winner. Their market share seemed to learned only one direction. Upwards.

Also, 10 years back, how many were active on internet. What was the size of the market? Without any hesitation, Today’s Social n/w, video, music market is much larger and so the number of competitors. Some markets are clearly absent 5/10 years back.

I believe, Big guys may not involve in an certain market, initially. Lack of vision or some other reason. But once a startup showed them how it can make money, big guys and small guys alike will sure jump on. MS and Yahoo did not put so much on search, may be initially. But after Google showed them the way, they really jumped big into it. Whether they succeed or not is a big question. But these days, it is quite true that even if there is a promise, every other company is jumping the band wagon, small and big alike and giving it a try. So it is totally a different environment these days.

Onto my comment…

You have very valid questions. May I propose some answers?

1) Is there any entrepreneur who builds a business thinking that Yahoo/Microsoft/Google/* won’t enter the market? Or assume there would be no competitors?

Well it seems that some do because when Y/M/G show up there’s total panic. If you built your business with a plan in mind for when small and big competitors get into the game, then you should be covered. That’s in theory of course, because a competitor’s superior strategy can blow you out of the water

2) If you think you spotted a great opportunity to build a product, why one think that no one else could spot the same opportunity and compete with you?

That’s why you usually want to be first on the market and become the leader as quickly as possible then count on the power of your brand and marketshare to protect your position. You Tube comes to mind right now…

Spotting is one thing. Action is another and usually the decisive actor.

3) Do we forget for some strange reason that every big fat guy starts so small just like any other?

They do but most times they don’t face the same competitive pressure. You can start small but in better conditions.

Google was in competition with no more than 10 search engines at the time. Try counting the social networks, online video services, tech blogs or digital music sites start-ups on the block today and you’ll probably agree that those are some tough battles.

I don’t know much about Microsoft except from research (I wasn’t born yet) but did it even have any competition when Bill started out?

Yahoo certainly did not have any competition so its rise to fame and riches was a pretty smooth ride…

4) If you lose your nerve by looking at G/M/Y/* entering your own market/product line, and start thinking about ANOTHER NICHE area/product/strategy, why do you think the big fat guy does not enter your NICHE market? They already did once, right?

Losing your nerve is not the solution. Acting as if the competition was negligible is one thing and devising an anti-mammoth competitive strategy is another.

This may sound simplistic but having time and speed on your side can be good defensive weapons. Lately, all the big companies are waking up to the online video reality. You Tube had one year and a half to become the dominant player.

That relatively short time to build a powerful brand worked to their advantage. According to Alexa it’s the 13th most visited website today. If I am not mistaken, Google Video launched first and took its sweet time to get where it is today (not in leadership position). Here of course, I conveniently overlook the fact that You Tube growth was largely fueled by the non-reluctance to allow users to upload copyrighted clips.

5) If there is some market that is not reachable or not approachable to a big guy, is there real money there? Because, if there is good money, then why would big guy miss it? Even after you showed them how to do it?

Sometimes the big guy does not get involved in a market because he does not have a vision of its potential. So the money, time and energy required pursuing such a little endeavor does not make any sense.

Google focused on search while other search engines were diversifying because according to them, search seemed to have its limitations, as it was not that profitable. They were all after the portal category, a race that Yahoo won. Then lo and behold, search grew and today, we all know who took all the marbles.

Better stop here… it’s 3:30 AM and need some sleep! Apologies for the TLDR rambling… I guess I got carried away. Looking fwd to your comments.