

Startups are not defensible - afathalla
http://afathalla.com/posts/Startups_Are_Not_Defensible/

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swombat
False. Startups may start out in an indefensible state, however, investors
will expect you to build some kind of defences somewhere along the way. If it
is impossible for your start-up to build such defences, you will become
commoditised rather quickly, and therefore may not be a good investment,
however good a project it might be in the first instance.

Building barriers to entry is a fundamental activity of the start-up that
wants to succeed in the long term. Examples of barriers to entry includes:
network effects, customer lock-in, stock, relationships with partners… those
are not necessary, and indeed often impossible, at the beginning of the life
of the startup. However, if they cannot be engineered at some point later, the
business is indefensible and therefore potentially a bad investment.

Successful businesses like Google, Facebook, or Apple, or Microsoft, may still
be disrupted. However, because of the barriers to entry in their markets,
these disruptions will happen over a period of years or decades, rather than
over a month. That is one of the factors that makes them great investments.

When investors ask about barriers to entry, they are not asking what barriers
to entry you have right now. Rather, they are asking what barriers to entry
you will be able to build over the next few years, should you happen to be
successful. And you better have an answer for that if you want their money.

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ArekDymalski
Asking about a source of competitive advantage is completely natural and
justified. Exactly due to the copycats risk. And yes, you're right. The
solution is to keep making things better for chosen customer segment. And for
them "better" can mean cheaper, faster, easier, more beautiful, prestigious
etc.

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saltzman
This is so true, Ahmed. I've been highly irritated by this question for a long
time. There is always more to it (see other comments - branding, market
expertise, 'better' product, blah blah) but at the end of the day, anyone can
innovate.

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Fofothemax
dear Ahmed your definitely right...One cant protect his idea or start up
business, one has to update and enhance his product-service constantly and add
new features to extend it's life cycle....But I believe there is a way to
preserve your ideas and products or services which is your target
consumer/customer loyalty to your brand which will make it hard for them to
switch from one product to another. Example Iphone users and Samsung
users..similar products one may have more features but it's brand loyalty that
makes an apple loyal consumer switch from Iphone 5 to 5's not to Samsung. the
key is BRAND IDENTITY =D

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jaredsohn
Mobile OS's also get user lock-in due to 1) people being familiar with how a
particular OS works and 2) people not wanting to start over with apps.

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craigvn
Better and Faster sure. Cheaper is substitute if you can't do the first two
and will likely fail.

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alborno
I guess building it first protects for a while until you start getting
attention.

