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Curse of First is the idea that a head start can often be a long term economic disadvantage. It is commonly used to explain why civilizations rise to economic and cultural dominance only to be overtaken. The idea can also apply at a smaller scale to cities, companies and individuals. The following are hypothetical examples.
Excesses & HubrisA civilization that develops an economic and military lead may develop excesses and hubris that cause it to collapse or waste away. Entitlements An nation or organization that is economically successful may become top heavy with an elite who demand excessive entitlements leading to some sort of revolution or collapse.InfrastructureA nation that is first to develop an extensive train system may have little incentive to upgrade the system to high speed rail later as the old system seems good enough.
Capital EquipmentAn airline launches in 1965 and aggressively purchases a fleet of hundreds of aircraft. In the mid 1970s, the airline struggles to compete with younger companies that have a modern fuel efficient fleet. The company is steeped in debt and is forced to operate with the old fleet despite rising fuel prices.InnovationA young company develops a valuable innovation and experiences a rapid period of growth. The first few employees at the firm were passionate about the firm's mission. As the company grows, it attracts employees primarily seeking a comfortable position and good salary who aren't as passionate about the industry. Innovation fades and the firm struggles to defend its position.
Early AdoptersEarly adopters of advanced new technologies may pay a premium to be first. Such technology may be quickly surpassed by updated products. In some cases, a new technology goes from being viewed as a competitive advantage to a disadvantage in as little as a year.
Business Theory
This is the complete list of articles we have written about business theory.
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