ChatGPT Crushed The First-Mover Myth For Entrepreneurs
OpenAI CEO Sam Altman. (Photo by Jason Redmond / AFP) (Photo by JASON REDMOND/AFP via Getty Images) ... More
Want to build a unicorn? Stop trying to be first.
OpenAI's ChatGPT proves that smart beats first – again. For decades, Silicon Valley, VC, and innovation evangelists have preached the gospel of 'first-mover advantage' – urging entrepreneurs to innovate, launch fast, and raise capital to grab market share before anyone else. Business journalists and even academics echoed the message:
Why Smart Beats First – Again and Again!
But the truth is different – and ChatGPT's explosive rise is just the latest example. There is a long line of smart movers who beat first movers, including
OpenAI didn't win by being first. It won by moving smart – and dominating.
The First Mover Myth
The First Mover myth has had a long history in venture development – both among academics and in the popular press (https://www.forbes.com/sites/dileeprao/2017/01/24/first-movers-seldom-win-first-dominators-mainly-do/). And this mantra persists, despite a long list of smart movers who outperformed the so-called first movers
Furthermore, if academic research is needed, a study from the Federal Reserve Bank of Boston showed that only about 11% of first movers dominated (https://www.forbes.com/sites/dileeprao/2017/01/24/first-movers-seldom-win-first-dominators-mainly-do/?sh=e9a94af19a12). 89% did not – and in fact, nearly half failed.
ChatGPT's breakout success proves the point again: first mover doesn't guarantee success or dominance. Success is not about the idea – it is about the strategy (product, customer segment, competitive strategic group, and sales driver) and skills.
OpenAI wasn't the first to launch an AI chatbot. Yet by improving on existing technology and strategically launching its entry, it leapfrogged early movers and redefined the category. If you're chasing venture growth, this case offers a powerful lesson: smart movers win – not necessarily first movers.
The History of AI
To evaluate ChatGPT's meteoric rise, we need to understand the history of AI. IBM and companies like Dragon were launching commercial AI products as far back as the early '80s.
In the intervening years, several giant companies had serious investments and businesses involving AI. They included Google, Amazon, IBM, Microsoft, and Meta. In fact, one could argue that nearly every major IT company was involved in AI.
The Emergence of OpenAI
Out of this emerging-industry fog, out comes ChatGPT from an emerging company called OpenAI that was started in 2015 and introduced its GPT products starting in 2022.
OpenAI is anything but a first mover. Yet its product, ChatGPT, has one of the most explosive growth records in venture history – growing to annual recurring revenue of $10 billion as of June 2025.
The 5 Lessons from OpenAI's Smart-Mover Rise
Given that ChatGPT (or OpenAI) was not the first mover and has not given the press an easy tag to explain its success, here are 5 lessons that entrepreneurs can take from this fantastic success – without the simplistic, and erroneous, 'first-mover' tag.
Lesson #1. Unicorn success is rarely just the product. Think holistically.
It is a combination of factors, including product, segment, strategic group, sales driver, and customer acceptance. ChatGPT was simple, useful, and perfectly timed for mass adoption.
Lesson #2. Find potentially large markets.
Most companies have to focus on the right market segment that can help them dominate. Sam Walton used this formula and focused on rural communities (LINK) and so did Mark Zuckerberg, who focused on universities (LINK). ChatGPT's product was so good that it has dominated many markets. This is similar to the success of unicorn-entrepreneurs like Bill Gates, Steve Jobs II (when he returned to Apple), Jeff Bezos, and Travis Kalanick (Uber).
Lesson #3. Find the right strategic partnership.
OpenAI formed a key partnership with Microsoft that invested about $13 billion and gave it massive credibility, in addition to capital.
Lesson #4. Use the freemium model if you have Silicon Valley VC.
The freemium model has been especially useful in Silicon Valley and with capital-intensive strategies. OpenAI checked both boxes.
Lesson #5. Success favors smart movers. Get smart.
The ventures dominating an emerging industry are usually early and smart movers who picked the right combination of product, segment, strategic group, and sales driver. By picking the right combination, OpenAI checked all the boxes of a smart mover. And won.
MY TAKE: Being first doesn't win. Being dominant does. ChatGPT, like many billion-dollar ventures, shows that smart execution, timing, and strategy matter far more than the order of the launch. Instead of racing to market, focus on building the right product for the right market with the right competitive edge for long-term dominance, and the right sales driver to take off with less. And do it before the industry takes off. That's how nearly all unicorn-founders took off and dominated.
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