First Mover Advantage?

One recurring theme which I read about is the number of successful entrepreneurs who advise going into an established market rather than trying to come up with a brand new unique business idea. 

Clearly, marketing a new product or entering a very immature market can be extremely profitable if you get it right and obtain first mover advantage. However, it is also accompanied by huge risk and consequently a high business failure rate.  A more calculated route is to enter markets where you can see ways to improve on the products or services being offered by the existing players.  This is surely the model behind Richard Branson’s Virgin group.  Student magazine, Virgin Records, Virgin Atlantic, Virgin Brides, etc are all examples of existing markets where Branson thought he could do better.  Occasionally he failed but on average he succeeded.

This approach is attractive because it carries less business risk in the sense that we already know that demand exists and that there is a market out there, whereas with a new market you really don’t until you dive in (probably at high cost).  If this logic stacks up then I would think the key for me is to research the value added that I could potentially generate in a given market by doing things differently.