There are so many areas for opportunity to implement disruptive technologies or new processes in the commercial real estate industry. However, it is better to be a first mover or wait till there is some catalyst or critical mass of acceptance? There are several advantages and disadvantages to being a first-mover:

Advantages:

1. Brand Recognition: The first mover has the opportunity to establish their brand as the leading and original provider of a product or service. This can create a strong brand loyalty among consumers, which can be difficult for competitors to break.
2. Market Share: A first mover can capture a significant portion of market share. This can help create a barrier to entry for competitors, who may struggle to gain a foothold in the market. A great example of this is VTS. The VTS platform is a leasing tracking tool that is widely used by investors and brokers. In CRE, once a technology is used widely such as VTS, many consumers are reluctant to change and will continue to use even if there is an alternative.
3. Control over Pricing: First movers can establish pricing strategies that can make it difficult for competitors to undercut them. This is true when a company has a strong brand and loyal customers.

Disadvantages:

1. High Costs: A first-mover requires significant investment in research and development, marketing, and advertising. It is high-risk for a first-mover company and there is no guarantee that the product or service will be successful in the market.
2. Limited knowledge of the market: First movers are often introducing a product or service into an untested market (in CRE there are a LOT of untested markets). There may be a lack of understanding of consumer needs, preference, and behaviors, which can lead to products missing the mark. From my experience, there is a lot of this in PropTech.
3. Potential for imitation: The success of a first-mover can attract imitators and competitors who seek to replicate a product or service. This can erode market share and lead to intense competition.

Since commercial real estate lags quite a bit vs. other industries in terms of technological change, Peter’s Thiel’s “last mover advantage” can be better strategy vs. the first-mover. Peter Thiel’s view indicates that it is more advantageous to be the last company to enter a market than the first. The reason for this is that last movers can learn from the successes and failures of the first movers and improve upon their products and services. The strategy can lead to a better understanding of the market and the ability to create better products that consumers need. In CRE, there generally tends to be a resistance to new technologies and adaptation / acceptance tends to be a long road for a first mover company. However, once the technology or new process is accepted, the floods gates open as there is rapid acceptance. The key consideration between first-mover vs. last mover in CRE is that the last mover will experience customer resistance to switch (similar to the initial resistance to new technologies) and so the first-mover market share is pretty secure and the last mover will need to work harder vs. other industries to capture market share.

Overall, the first-mover advantage is not a myth. It can offer advantages such as brand recognition, market share, and control over pricing. However, being a first mover also has its disadvantages, including high costs and the potential for imitation. The last mover advantage can offer an alternative strategy that leverages the successes and failures of first movers to create superior products and services. Ultimately, the success of a business offering a new technology or process depends on many factors such as the type of industry, market, and competition. These factors can inform the the approach on whether the first-mover will experience peril or security.

Stay safe out there!