Defensibility Is Key -- Just Ask Amazon

When I look at a business idea, I initially think through two primary criteria to forecast its success. Of those two, the most important is defensibility: making sure your business idea can maintain an advantage over similar products or services in the market.

When Amazon launched, no one could foresee the size and scope of that business (at least no one other than Jeff Bezos), but the truth is that Amazon.com is amazing on many levels. I consider it to hold one of the single most brilliant patents in the history of humankind (patent number US 5960411, for those of you who care): Amazon 1-Click.

I don’t know about you, but I felt as though I had less time and more things to do than ever this past holiday season.  I literally could not have accomplished all my holiday shopping if it wasn’t for Amazon and that addicting 1-Click button.  It’s just plain silly how much that simple idea has made it easier for me act like the hero, getting gifts bought at the very last minute time and time again.  I hate shopping, but I like buying, and Amazon creates a defensible strategy by making buying very, very simple.

This sounds like a plug for Amazon, and I apologize if it comes off that way, but there are very few things these days that are so universally loved!  Amazon is like the Beastie Boys and Katy Perry: It’s hard to find someone who doesn’t respect or like those folks on some level.  

I know some small-business owners would probably argue with me, but I’m looking at this solely through the lens of a consumer.  1-Click creates impulse buying decisions for everything; even those semi-considered purchases now become impulse buys.   For someone else to come along and see that same level of success in online shopping, they’d need to come up with a viable alternative to 1-Click, and call it something else, because the name is trademarked, of course.

My point is simple.  If you’re developing a business idea in 2014, make sure you have a competitive advantage that cannot be quickly redeveloped by someone else.. The ad network and agency space was crowded for a long time because it was full of “me too” strategies, but through time, consolidation and simple clutter, things have filtered out.  These days ad and marketing tech companies have truly advanced beyond what they were, and in many cases the technology is very defensible. 

This raises the bar for entrepreneurs, making it more difficult to start a company these days -- unless you know what you’re doing.  To that end, I predict we‘ll see a resurgence of investment in early-stage companies in 2014 to counteract the absence of this money in 2013.  VCs stopped putting money into these companies, but that will likely change this year because entrepreneurs will get smarter and ideas will be more defensible.

So next time you go to the grocery or a department store, just imagine what it would be like to have the equivalent of 1-Click in the store. How would that kind of innovation create defensibility in a rather dated business? You could walk out the front door, and all the items you were carrying would be immediately charged to your card on file.  Pretty awesome, huh?  I bet that would be the only place you’d buy groceries from that point forward!

Tags: start-ups
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1 comment about "Defensibility Is Key -- Just Ask Amazon".
  1. Tom Francoeur from Communispace , January 8, 2014 at 10:27 a.m.
    Fun read, Cory. Totally agree. Amazon is an excellent model for entrepreneurs. I've worked in PR for tech startups for 13 years now. I've seen many innovators come and go. But when an entrepreneur has something truly unique and is making it a success - it's a thrill to be there on the ground floor and see the business take off. (I also love how you put the Beastie Boys and Katy Perry in the same reference. I'd guess the Beastie Boys are your favs, and would also wager you have a daughter/daughters who have brought Katy Perry into your pop music experience. That's pretty much where I am.) :-)