How Late Should Johnny-Come-Lately Come?

Potential followers are heterogeneous because of their access to alternative levels of complementary assets and the different degrees of relatedness of these assets. Using a decision-theory approach, we build a model that enables us to identify under what conditions a follower can afford to wait to enter a market, and for how long the delay is viable. We demonstrate that these conditions not only depend on the effect of industry age on the follower's complementary asset characteristics, but also on both a direct and indirect effect of industry age on performance. Specifically, we show that a high degree of relatedness in the follower's complementary assets does not necessarily afford the opportunity to wait, as the ability to wait depends on whether these direct and indirect effects are weakened or intensified by the strength of the relatedness.