Investors tend to love first-mover advantage, especially if you are targeting a large addressable audience. Why? Because market share is king, and first movers have a larger chance to grab more at the start.

However, many companies claiming first-mover advantage don’t actually have one. Real first-mover advantages are rare. Often, existing solutions already address the underlying need, and new companies just create alternative ways to solve it. Most successful businesses, even those operating in an extremely winner-take-all market, solve a problem that has already been solved, but better, in a unique way, or for a different audience, or at a much cheaper price. Your first task is to prove that your first-mover advantage is, in fact, a first-mover advantage. I can’t think of anything worse than pitching a first-mover advantage and having the investor say: ‘I thought you said you were first to market. I have three companies in that space.’ How do you do this? Read here.

Once you’ve validated your first-mover positioning, the next step is presenting it in the right way to investors. Here’s the thing about first-mover advantage. It’s pretty much always expensive. Most first movers die early, leaving room for second or third movers who learn from their mistakes and win with a better product. As they say, “Pioneers usually die of bug bites and dysentery.” Think:

• Facebook vs. Myspace

• Foursquare vs. Loopt

• Sybase vs. Oracle

• Lotus vs. Excel

• Salesforce vs. Siebel

Your core task is to explain how your advantage will be durable and sustainable.

💍 Validate the demand: Prove that even though the market is new, there is a huge pain point and a willingness to pay. Back it up with solid proof — how much of the market is currently unaddressed, how many deals would face no competition, etc.

🛼 Show your path to market: First movers often need to invest massive amounts of capital in building the category and educating consumers. Focus on how you will do this in a cost-efficient way (community growth, smart distribution strategies, etc.).

🚔 Demonstrate how you will protect the advantage: If it’s a blue ocean, it won’t be for long – multiple new entrants will be coming to play. Creating categories doesn’t win you categories. You have to have a strong moat – a network effect, a proprietary technology – something to help you protect that.