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> even if you did manage to catch up, any useful innovations would be copied by incumbents.

If your optimization is sufficiently novel, can't you use intellectual property to protect yourself?

If that isn't an option, how do you provide yourself enough runway to scale fast enough to escape the incumbents?




Only if you can a.) detect that the incumbents are copying you (in ways that can be legally protected - in general you can't protect what a product does, only how it does it) and b.) have the money for a legal battle against a well-funded incumbent and c.) know that you aren't infringing on any of their patents or IPs. Most startups don't fit all 3 of these categories.

The way most startups manage to get big is to fight on ground that big incumbents are unwilling to occupy, while their attention is occupied elsewhere. IBM thought that software was a loss-leader and the money was all in hardware: they came out swinging hard with the IBM PC and eventually dominated the market, but didn't realize that leaving the IP for MS-DOS in Microsoft's hands would be a crucial error when the PC BIOS was cloned. Microsoft knew how to fight on platforms and ended up crushing Netscape, but they had no idea that Google (ostensibly "just a search company") would end up occupying the crucial real estate on the web.




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