The proverb can also be rephrased as an anti-proverb : ''The early worm gets caught by the bird''.
Whether we accept the proverb or the anti-proverb depends on whether we visualize ourselves as the bird or the worm. If we visualize ourselves as a bird, then the interpretation is quite obvious. On the other hand if we visualize ourselves as the worm and go by the anti-proverb, it makes us feel quite lazy and insecure; as if we are not really prepared for confronting our adversaries. But that really doesn't mean one has to feel weak or inferior in visualizing oneself as a worm and stay hidden in a cocoon. The motivation of the early worm to rise early is to avoid getting caught by the bird. That is because if the worm wakes up late, it can't prevent the inevitable from happening- it will eventually end up getting caught by the bird . Another cardinal sin for the worm is to assume that the bird will also not rise early- this is a sure shot recipe for disaster.
A very common example to elucidate this bird and worm syndrome is our college life. Obviously the worm refers to the students and the bird (eagle to be precise) refers to the professors. This proverbial bird always has the habit of rising early to conduct lectures and the proverbial worm always has the habit of doing exactly the opposite and consequently ends up missing the lectures. Hence, it faces severe reprimands and threats like not being eligible for semester exams and placements due to attendance shortage, term not granted etc. The end results are catastrophic. So its always better (though difficult) to wake up early. In that event the early worm will not get caught by the bird. This will negate not only the proverb but also the anti-proverb.
