After getting hit by an idea, typically our first concern is competition, we know we need to be different so we start by studying the existing competition. With a little bit of effort, we manage to define our solution in such a manner that makes it different enough. Often times we make our solution so unique that we even convince ourselves that there is no competition anymore. We believe that our unfair advantage will come from being the first mover and that makes us happy.

The first-mover advantage is by far the most common unfair advantage sided on business plans. But for perspective, consider these companies:

none of these companies were the first movers in the respective products we know them for. Rather, they were all fast followers. They all improved on an earlier innovation and displaced the first movers.

Being the first mover in a market is not an unfair advantage but an unfair disadvantage, because not only you have to build a great product but you also have the burden of building a market.

None of the following things listed are by themselves defensible unfair advantages:

A real unfair advantage is something that cannot be easily copied or bought by your competitors

A great illustration of the difference between real unfair advantage from a weak one is the difference between organic SEO ranking versus paid keywords for search engine marketing. Keywords can be easily copied and bought by your competitors, while organic ranking has to be earned.

What do you do if you don't have an unfair advantage from day one?

Most entrepreneurs don't have an unfair advantage at the outset of their idea. Consider Mark Zuckerburg. He wasn't first to build a social network and a number of his competitors already had a huge head start with millions of users and millions of dollars in funding. That didn't prevent him from building the largest social network on the planet.

While Mark didn't have an unfair advantage day one, he had an unfair advantage story. He knew his unfair advantage needed to come from large network effects which prioritized everything Facebook did until they realized this advantage.