Just because a company has occupied an industry longer than their competitors doesn’t necessarily mean they have a competitive advantage over their competition. Executives and marketing professionals often tout the length of time a company has been in existence as a crucial differentiating factor. The message they are trying to convey is that the time they have occupied in the market has led to them gain an edge over their competitors because they have had the time to gain valuable experience. This is great in theory, but doesn’t always play out so well in reality.

The problem with claiming experience as a differentiating factor is that, put simply, experience is often simply not a differentiating factor. Not all experience is created equal. In fact, a company that enters a market first often assumes extra risk because they have to pioneer that market. What they have to painstakingly learn is often taken for granted by companies that follow, especially when the experience is not proprietary and protected through patents, copyrights, trademarks, etc. Companies that follow have an advantage because they can capitalize on the experience of others and start with newer technologies and schools of thought, which often come more cheaply than the initial round of information, manufacturing plants, software, and other technologies did.

The Android smartphone operating system is a perfect example of how a competitor can enter a market late and become a market leader. Google entered the smartphone OS market much later than competing firms Research In Motion (Blackberry) and Apple.  In a landscape where people clamor over features, Google used consumer research data and piggybacked off of the experiences of their competitors to provide an offering to which consumers have quickly responded. As a result, Google’s Android OS is now the leading smartphone OS in the nation. Apple’s iPod all but killed the Sony Walkman, Facebook has passed MySpace to become the largest social networking site, and Twitter has become a social phenomenon. All have done so in a relatively short time. Don’t rest on your laurels. There is always somebody vying for your spot. Complacency has been the downfall of many.