The idea of first-mover advantage is similar to the old adage, "the early bird gets the worm." In business, being the first company to sell a new product may provide long-lasting benefits or competitive advantages. Most researchers use the term, "first mover" to refer to the first company to enter a market, not the first company to develop a product (the inventor). First movers are also called market pioneers. The benefits of pioneering may result in market dominance and higher-than-average profitability over time. There are several reasons why these benefits may develop, but research has shown that being the first mover does not always provide advantages. Sometimes there are even first-mover disadvantages, where companies that enter a market later can achieve superior results to those attained by the first-mover firm.

For example, Amazon.com was the first major online bookstore, seizing a head start on later...