Erecting Barriers to Competition That Are Difficult to Duplicate

Competition is inevitable, that is why it’s wise to prepare for it and immunize yourself with difficult to copy differentiation where possible. A pure focus on implementing new features as fast as possible in an effort to outrun the competition is unlikely by itself to be enough. Here are some barriers you can erect that are often difficult to duplicate, or at least duplicate rapidly:

• Customer satisfaction: customer relationships with a track record of support and evolution in services. Focusing on customer satisfaction erects a barrier an is always a good idea.
• Proprietary data, info, or know-how that complements functionality
  • Beyond user data, e.g. link data for user relationships that’s “owned” by both users but maintained by the service, for example a LinkedIn Recommendation.
  • Other examples: a custom dictionary or taxonomy, a proprietary set of business rules/logic
• Partner relationships: Developing key partnerships or other third party relationships that are either explicitly exclusive or effectively exclusive can be both a source of unique value and further differentiation against competitors.
• Knowledge of  a customer’s future plans and needs:  jointly committed private roadmap helps to maintain alignment. Taking the time to do joint planning with key customers makes you much harder to displace.
• Network size in network driven businesses: Metcalfe’s Law works in your favor if you are larger (and against you if you are not).

There are many more: only commodities–products with a fixed spec or non-evolving feature set–are purchased purely on price (and delivery).