1 00:00:01,000 --> 00:00:03,060 - No matter how awesome you think your product is going 2 00:00:03,060 --> 00:00:07,050 to be, it's likely you're going to have competitors. 3 00:00:07,050 --> 00:00:10,050 Remember, you might be disrupting an existing market 4 00:00:10,050 --> 00:00:12,080 that has bunches of competitors and you're trying 5 00:00:12,080 --> 00:00:14,090 to do something different against them. 6 00:00:14,090 --> 00:00:16,070 Or you're coming into a market that, 7 00:00:16,070 --> 00:00:18,040 maybe you don't think exists, 8 00:00:18,040 --> 00:00:21,050 but there will be competitors at some point. 9 00:00:21,050 --> 00:00:24,090 As you're thinking about both your product and your market, 10 00:00:24,090 --> 00:00:28,090 make sure you think about barriers to entry for others. 11 00:00:28,090 --> 00:00:30,050 So you should assume that, if you're going 12 00:00:30,050 --> 00:00:33,000 into a market with existing companies 13 00:00:33,000 --> 00:00:34,090 that you're going to be competitors with, well, 14 00:00:34,090 --> 00:00:36,050 they've got resources too, especially 15 00:00:36,050 --> 00:00:38,050 if they're much bigger companies than you. 16 00:00:38,050 --> 00:00:40,080 And so, their ability to do things to start 17 00:00:40,080 --> 00:00:42,070 to compete back with you when you're starting 18 00:00:42,070 --> 00:00:45,050 to disrupt them is significant. 19 00:00:45,050 --> 00:00:46,080 If you're entering a market 20 00:00:46,080 --> 00:00:48,020 that you feel like is a new market, 21 00:00:48,020 --> 00:00:49,070 doesn't have somebody in it already 22 00:00:49,070 --> 00:00:51,070 that you're a natural competitor with, 23 00:00:51,070 --> 00:00:53,080 if that's an attractive market, you should assume 24 00:00:53,080 --> 00:00:56,010 that other companies are going to start going after the market 25 00:00:56,010 --> 00:00:57,070 when they see that you're having some success 26 00:00:57,070 --> 00:01:00,020 with it, so establishing barriers 27 00:01:00,020 --> 00:01:02,080 of entry early are really important. 28 00:01:02,080 --> 00:01:05,070 Now, these barriers of entry can be structural 29 00:01:05,070 --> 00:01:07,060 in the context of your product. 30 00:01:07,060 --> 00:01:09,090 So they're things that cause it to be very hard 31 00:01:09,090 --> 00:01:13,010 for somebody to switch from your product to another product. 32 00:01:13,010 --> 00:01:15,060 Or it can be things that disincent people 33 00:01:15,060 --> 00:01:17,010 to switch from your product to some 34 00:01:17,010 --> 00:01:19,000 other product because of additional benefits 35 00:01:19,000 --> 00:01:20,090 that your product gives the customer, 36 00:01:20,090 --> 00:01:23,030 the more they use your product. 37 00:01:23,030 --> 00:01:26,090 They could also be functional capabilities of your product 38 00:01:26,090 --> 00:01:30,000 that are extremely hard to duplicate, and as a result 39 00:01:30,000 --> 00:01:31,070 of them being extremely hard to duplicate, 40 00:01:31,070 --> 00:01:34,010 even though somebody might start to compete with you, 41 00:01:34,010 --> 00:01:36,060 all of a sudden they run up against a wall 42 00:01:36,060 --> 00:01:38,060 in terms of that extra part of your product 43 00:01:38,060 --> 00:01:43,060 that's going to be very, very difficult for them to recreate. 44 00:01:43,060 --> 00:01:46,050 The other part of barriers of entry have nothing to do 45 00:01:46,050 --> 00:01:49,040 with the product itself, but the market dynamic 46 00:01:49,040 --> 00:01:52,090 of how you go to market and how you deal with 47 00:01:52,090 --> 00:01:54,060 and engage with your customers. 48 00:01:54,060 --> 00:01:57,020 It could be the distribution channels that you use. 49 00:01:57,020 --> 00:01:59,030 You might be able to set up distribution channels 50 00:01:59,030 --> 00:02:02,040 where you have some exclusivity, whether it's exclusivity 51 00:02:02,040 --> 00:02:07,040 through a particular selling channel, like a retail store, 52 00:02:07,040 --> 00:02:10,040 whether it's through the dominance, 53 00:02:10,040 --> 00:02:13,070 presence of your product in a particular category. 54 00:02:13,070 --> 00:02:15,030 You can also set up situations 55 00:02:15,030 --> 00:02:18,050 where it's just very difficult for somebody else 56 00:02:18,050 --> 00:02:22,010 to find your competitor, relative to the type of product 57 00:02:22,010 --> 00:02:24,030 and the way your product's positioned. 58 00:02:24,030 --> 00:02:27,080 So thinking through all of these different approaches, 59 00:02:27,080 --> 00:02:30,050 whether they're product-centric or market-centric, 60 00:02:30,050 --> 00:02:34,010 in the context of creating barriers to your competitors, 61 00:02:34,010 --> 00:02:37,020 is very important to build in at the beginning, 62 00:02:37,020 --> 00:02:39,090 rather than at the end, when there's nine companies 63 00:02:39,090 --> 00:02:41,060 in the market that you're going after. 64 00:02:41,060 --> 00:02:43,080 And by the way, if you're a company that's showing up 65 00:02:43,080 --> 00:02:45,080 and there's already nine other companies 66 00:02:45,080 --> 00:02:48,080 that are doing something that's very similar to you, 67 00:02:48,080 --> 00:02:51,060 and you're not meaningfully better 68 00:02:51,060 --> 00:02:54,060 than those other nine companies, 10 times better, 69 00:02:54,060 --> 00:02:55,070 you're probably going to run into 70 00:02:55,070 --> 00:02:57,040 their barriers of entry very quickly. 71 00:02:57,040 --> 00:03:00,000 So it's going to be hard for people to see your product 72 00:03:00,000 --> 00:03:02,030 in all the noise that's going on, 73 00:03:02,030 --> 00:03:04,040 or break through the market dynamics 74 00:03:04,040 --> 00:03:07,020 of choosing your product versus somebody else's product. 75 00:03:07,020 --> 00:03:10,020 So in some ways, studying what's going on in that landscape 76 00:03:10,020 --> 00:03:12,020 and thinking about what barriers to entry 77 00:03:12,020 --> 00:03:15,010 you're going to run into can help you start to define 78 00:03:15,010 --> 00:03:18,000 and establish barriers to entry for other people 79 00:03:18,000 --> 00:03:21,000 who are coming after your product in the future.