Startups who come with a new idea work on it using their money, time and resources. 90% of the time, they fail. And the reasons of failure become a good case study for new startups who come in the same space. The chances of new guys failing would be lesser than the earlier ones. In a world where technology is fast changing, any startup making significant time/money investments on a new idea would have the same fate. The opportunity lies in working on an idea for a shorter period of time, make it look futuristic and raise capital – not small, but bigger one enough to create an entry barrier. The biggest entry barrier is cash in the bank – potentially big enough to scare the newbies or even buy smart newbies or shut them down.
An externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit. So being a pioneer comes at a huge risk of failure. Google was the 21st search engine.
