First Movers Domination

First Movers Domination

In Web 1.0 companies, the first mover had an advantage, but often ran out of financial runway. The companies had to spend their investment capital on marketing, staffing, and IT to establish the product/market fit. Once their capital was spent, investors and employees moved on.

The second mover was able to learn from their model, and dominate. Too often, the second mover also ran out of financial runway, only to be acquired by a larger company with no further growth.

In Web 2.0 companies, the situation improved, as large Venture Capital firms were able to provide significant runway through subsequent rounds of funding (B through D). Companies could retain their first mover's advantage, but they lost control over their large equity stake and had to follow the direction of external financial investors.

The second mover was able to learn from their model, raise larger capital rounds upfront with a higher retention of equity (10-12%) and dominate the space.

In Web 3.0 companies, we see First Mover's Domination (FMD). Blockchain companies are able to define their own tokenomics, mint their tokens, and raise capital. Their success begets further success, as the price of their tokens rises in alignment with their progress, attracting further investors and raising the wealth of their current stakeholders. They are able to establish First Mover's Domination in the space, leaving the second mover in a weaker competitive position. We see this with examples like Ethereum, whose valuation far exceeds newer competitors who have more modern and efficient models, but lack the investment capital.

We see examples of this First Mover’s Domination in utility tokes, particularly in the Binance Smart Chain network.

  • Infomatix.io will likely take a First Mover's Domination position, by establishing the $INFO token in a targeted Information As A Service Cryptocurrency (IAASC) market
  • Lemonn.io will likely First Mover's Domination position, by establishing the $LMN token in a targeted Jobs Network Listing market

Author bio

Shem O'Flannigan is Sr. Desk Editor, Investment Grade Coins.

Publication date: 
11/29/2021 - 09:00
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