Is it necessary to be the first mover to win in a nascent market? Can investors who missed the first bus, hop on to another one that started from behind but finished first?
We, at WaterBridge Ventures, sifted through hundreds of global companies to identify such biases that play in investors' minds. Delighted to present "Beating Our Biases", Part I. 🎊
🏁 To finish first, one need not start first.
When a company is just starting to build in a completely new market, it is exciting to back them. The first mover comes with its advantages -
🪤 hardly any competition to impede growth,
🪢 high brand recall and customer loyalty,
♟️ easier to build and maintain moats.
But challengers look at this as an opportunity. If the newly created market promises gold, then a rush is inevitable.
In that rush, the challengers who are resilient stay alive for long, have a higher chance of winning.
Sustained longevity is a great indicator of ultimate success.
🛖 Opendoor survived in the home reselling space for long, even after many of its domestic and international competitors (such as Aiwujiwu in China) shut down.
🚴♂️ While Peloton pioneered interactive home cycling sessions, Zwift, a late entrant, stayed low and focused on execution. Ultimately, it became more popular than Peloton.
🏖️ Viator started marketplaces for tours and travel experiences. Klook uncovered that travellers increasingly wanted to book on mobile phones. It rode the wave of rapid growth in the mobile-facilitated travel market, to reach ~40M users today.
🥕 Instacart copied Webvan’s model of delivering groceries to the doorstep. It went public in 2023, while Webvan went bankrupt.
Such examples abound in India too! If you can identify any, write in the comments. And if you're a ConsumerTech founder building challengers in India, please write to [email protected]