
Hard is not defensible (2017) - saadalem
https://www.alexcrompton.com/blog/2017/05/26/hard-is-not-defensible
======
solidasparagus
I thing this article is missing a third type of hard: time-consuming/long-tail
hard. Google solved a hard problem, but it's a technical problem and it could
be replicated by another company, particularly since there are probably a lot
of developers who have experience working on Google's Search. But the problem
is that there is an absurdly long tail of features (curated news sources,
relevant social media results, answer boxes, etc) and being able to serve that
long-tail is part of what makes Google so valuable. It would take years for
even a well-funded team to catch up to Google in this regard and the high
barrier-to-entry is absolutely a moat.

~~~
simonh
I think that's just a type of bodybuilder hard. It just takes a lot of effort,
discipline and time to do it.

~~~
solidasparagus
I disagree. Bodybuilder hard at described in the article is just a matter of
effort. High barrier-to-entry means that you need extreme resources to start
competing. I think they are quite different.

~~~
simonh
Having resources is just a different thing, they’re not a kind of work.
Getting the resources is work, sure, but it takes either cleverness (maths
hard) or effort (bodybuilder hard) to get them, or is not hard at all because
you already have them. But actually building the things you cited is
bodybuilder hard.

~~~
solidasparagus
That's really not true. You can try as hard as you want but you will not be
able to spin up a search competitor right now because the funding literally
doesn't exist.

~~~
Firehawke
Even suggesting you want to tackle Google's lead in search or ads as a startup
will get you laughed out of the room.

The amount of time, effort, and funding needed is well beyond what any
investor wants to even consider.

~~~
lumost
There are search competitors in non-US markets. The lack of funding begs the
question of whether Google's search lead is simply due to no one trying to
compete within the last 10 years.

DDG doesn't really qualify here as they aggregate google/bing search results.

~~~
simonh
How about Bing? Yes I know, they're easy to forget about, but....

~~~
lumost
Bing started 15+ years ago as a feature for feature clone of Google.
Historically they've simply crawled Google results and replicated whatever
Google returns. It could be a data point that Google has made the perfect
search system as of 15 years ago - or just a footnote of the balmer era of
Microsoft like Windows phone.

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jpm_sd
> In startups, being defensibile means competitors can’t catch you once you’re
> ahead.

I'm not sure this is a useful concept. Investors are burning billions of
dollars trying to ensure that Uber-or-Lyft [or insert other unicorn battle
here] gets un-catch-ably "ahead", meanwhile neither is a successful business
in the traditional sense. There are tons of successful businesses in the world
that just execute well and deliver value in exchange for money. They're not
succeeding because they are "ahead" of the competition, they are succeeding
because there is plenty of room for multiple competitors to succeed.

~~~
LeifCarrotson
The difference is whether or not that business has network effects that reduce
the viability of competitors.

For example, in the Uber-or-Lyft 'battle', sure, there are and have always
been private car companies and private drivers, but when you want a car you're
likely to open one or maybe two apps on your phone and call the
quickest/cheapest option. Similarly, Facebook competitors have a hard time
getting off the ground because when you're the only one in your friend group
on a new social network, there's no one to talk to.

Meanwhile, a new email provider has a small amount of work to do to catch up
with all the security regulations, but then can just provide value to its
customers without having to worry about 'defensibility'. A single app
aggregating Uber, Lyft, taxi, and 3rd-party car services on one screen would
open those up for competition. Similarly, a federated Facebook that provided
various social networks in one client would let you pick your hosting
provider, configure your own feed, and communicate with people on other
platforms.

~~~
Retric
Uber’s problem is people living in NYC etc mostly just stay in NYC or other
major city. The app advantage is only really meaningful for travelers which
make a small slice of the overall market. A low cost local competitor in NYC
would rapidly get New Yorker’s to swap over and it could then grow one city at
a time.

For now everyone is just waiting until Uber and Lyft run out of money, but
longer term it’s really not looking good for them.

------
zomglings
I agree with the article, but I also disagree with investor focus on
defensibility over hardness.

If you are investing in a generic software startup at an early stage, it is
much more reasonable to ask them:

"How many months/years of head start do you have over the competition, and how
will you use my money to solidify this head start into an unfair advantage in
your market?"

than to ask them:

"What stops someone else from doing this?"

Because if they are an early stage, generic software startup, chances are that
the honest, no bullshit answer to the second question is, "Nothing." And that
doesn't mean that it would be a bad business to invest in.

~~~
skrebbel
I fully agree, but I've yet to meet a VC that really appreciates honest, no
bullshit answers.

I've talked with plenty VCs and my impression is they strongly prefer founders
that are happy to bullshit them, and ask questions particularly to test that.

My theory is that the good ones do this on purpose, and the bad ones got
bullshitted so often that they got used to it.

I don't think it's a terribly bad strategy even. If you're looking for Travis
Kalanick style "growth at all costs" type founders, then brutal honesty is
pretty low on the list of important character traits.

~~~
linuxftw
> I fully agree, but I've yet to meet a VC that really appreciates honest, no
> bullshit answers.

That's because you need to be able to effectively bullshit your customers and
users. If you can bullshit the VC, well then surely, you can bullshit anyone.

------
shard
Bodybuilding hard seems to conflate 2 types of hard tasks: move-a-mountain-
with-a-shovel hard, where something is time consuming, such as having to hand-
label millions of images for machine learning datasets, and quit-heroin hard,
where something is against human desires, such as convincing people to abandon
their current way of doing something for something else that is a short-term
loss but a long-term gain, for example switching to a more performant but
incompatible CPU architecture.

Math hard, as the article says, is not really defensible, since copying is
easy. Move-a-mountain hard is more defensible along the time/money axes,
competitors need to throw time/money at the problem to catch up. Quit-heroin
hard is the most defensible, since customers will loath to pay the switching
price regularly.

Of course, it's not as black-and-white as this. All products have a mix of the
three, and its where the product lands in the mix that determines the
promotion strategies that the company should take.

~~~
XargonEnder
I like how you identified the hard not to do factor

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Ozzie_osman
Couldn't Google be an example of this? Search is a hard problem, even if
you've got MSFT-level resources. There are definitely economies of scale and
some weak network effects that help companies like Google, but I'd argue it's
most because they do something hard better than anyone else.

~~~
simonh
They're not dominant because it's hard though. Bing is similarly capable, but
even if it gained a clear edge would it really win out over Google? Market
dominance has little to do with hardness. Making a new cola isn't hard, but
brand recognition and ubiquity are huge advantages on a different axis.

~~~
patmorgan23
Habit is also massively important in what products /brands people use. Even if
there is a superior, cheaper product many people will continue using the same
product because that's what they always done.

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mumbisChungo
All you have to do to be "defensible" in many industries is observe the status
quo, but add decent customer service.

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YeGoblynQueenne
>> It’s unrealistic to think that you’ll ever have a totally unique insight,
let alone one other people couldn’t come up with if they really wanted to.

These gentlemen would beg to disagree:

[https://en.wikipedia.org/wiki/Wright_brothers](https://en.wikipedia.org/wiki/Wright_brothers)

Before the Wrights, numerous others had tried and failed to achieve what they
achieved. Of course, once the Wrights succeeded (or rather, some time after)
their idea was free for the taking. But the Wrights did have a "unique
insight" that was only their own.

~~~
013a
The article says its unrealistic; not that its impossible.

Its unrealistic to tell every star High School athlete that they'll become the
next million-dollar NFL player. But, its not impossible; in fact, they bring
on million-dollar players every year. The point isn't that its impossible; its
that its improbable.

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_bxg1
I would tend to think the key is the "soft" aspects of your business. The
things that can't simply be copied or commoditized. Customer service, being in
tune with your target market and their wants and needs, responsiveness to
feedback, institutional knowledge.

Everyone still uses Slack even though it is not an especially hard product to
build, and even though Microsoft and Google have both shipped clones that work
fine and integrate with their other products. Why? Part of it is brand
recognition and a network effect, but I think an important factor is that
_this is all that Slack does_. Slack _really really_ cares about making the
best chat tool for people to use at work. They put all of their energy into
constantly improving it; they give it their human attention. The same is
partly true of Dropbox vs Google Drive and OneDrive.

Google Meet and Microsoft Teams don't really matter to those companies. They'd
like it if you used them, they'll allocate some cash to keep them going. But
it wouldn't be a _huge_ deal if they lost the battle and those products died.
A company's culture, institutional knowledge, and focus can't simply be
copied.

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staycoolboy
This is dead on. I've also heard this referred to as "tactics" and "strategy".
"Tactics" are various bullet-lists of things you need to repeatedly do to
maintain best practices (eating protein & lifting). "Strategy" is generally
longer term and requires clever thinking (like Pythagoras).

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jmastrangelo
I highly recommend the book 7 Powers by Hamilton Helmer. Helmer defines
"Power" as the ability to retain meaningful profit margins for a meaningful
period of time. Each of the 7 Powers is a method he has seem companies use to
retain this (network affects, switching costs, etc.). Very insightful read.

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test7777
Tbh, it looks like they are ignoring the elephant in the room: intellectual
property...

~~~
hi_im_miles
Yeah, this article is assuming a competitive environment when in reality there
exists an arsenal of state tools available for corporations to entrench
themselves as monopolies: IP protections, subsidies/contracts, regulatory
capture, etc etc.

------
pedalpete
I think there are a few issues with this article.

Firstly, body-building hard ignores the fact that a competitor can't build up
muscle overnight, and every day they spending building their strength is a day
you continue building on yours. They need to be able to catch you, which they
can't do.

Another analogy would be a marathon run. If you're already half-way through
the marathon when others are just starting, the competitors need to have a
strategy or capability which lets them run faster than you.

It's another way to look at why you need to be 10x better than a competitor.
You need to be moving faster than they are.

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Animats
"Math-hard" is not defensible in the US because the patent system has been
weakened so much. VCs in the 1980s and 1990s looked for a strong patent
position. VCs today look for a strong marketing position. VCs as a class made
money in the 1980s and 1990s made money. That stopped working around 2000,
when throwing money at something to buy market share took over.

(Yes, this will be modded down by the "IP should be free" crowd.)

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karmakaze
One thing that isn't mentioned is that the 'intrinsic' body-building-hard
isn't fixed for everyone.

Obligatory "Beating the Averages"
[http://www.paulgraham.com/avg.html](http://www.paulgraham.com/avg.html)

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sabas123
Can somebody explain to me why we care about these classifications, and why I
wouldn't want to divide these into more (slightly) arbitrary groups?

------
konschubert
What about Intel?

~~~
verall
Silicon is bodybuilding-hard. It is extremely hard so there are few
competitors, but it is inherently a series of extremely expensive coordination
problems. To churn new architectures every couple years takes an oiled machine
of thousands.

~~~
jmastrangelo
Don't forget that Intel had a few decades where nearly all software was
written for their x86 chips. This reinforced every computer needing to have
intel, and only recently has the move to web apps made it easier for devices
to use something other than intel.

