Ask HN: What's actually "defendable" about web startups these days? | Hacker News Reader

Ask HN: What's actually "defendable" about web startups these days?

16 pointspolymath2113 comments

For example, what's keeps Gowalla from copying Foursquare's features, and vice versa? Unless a startup is working on something truly revolutionary and highly technical, how would a startup answer the question: what's keeping competitor X from copying you?

The lack of an IP warchest for today's startups seems to me like a glaring weakness. And you can't answer with "our team", "the way we execute", etc. I mean something that's truly defendable. (I guess Facebook DID patent the news feed...)

Just something I've been thinking about lately, but have yet to find a satisfying answer for and thought I'd ask the HN crowd. Thanks!

View on HN

This question does not exactly keep me up at night, but if it did, my answer might sound like "Our most important product isn't the one we're selling, it is the processes we use to make and market the product(s) we're selling and will sell in the future, and those processes are non-trivial and so ridiculously superior to what the competition will be using that they will never catch up."

IMVU or Zygna are good examples of this. Neither has a patent wall around them, either is about as well defended as any business based on computers can be. The reason is that, while you can make your own Big-Chested-Anime-Chicks-Farming-Together-Chat-Client in not a whole lot of time, you won't have their creation process... and they're learning so fast about their markets that they will bury you. The advantages they get from the whole lean startup thing -- fast learning and fast production -- are compounding, because it buys them more traditional advantages like network effects, kickstarts their virality, gives them money to buy insane amounts of FB advertising, etc etc.

This is totally not limited to these market segments. (If either of them were in search-focused verticals I'd tell you about how this helps build the self-reinforcing authority cycle for SEO, too.)

Also, you could clone their site, but you couldn't clone the underlying understanding required to better it.

That's absolutely it: it's not the product, it's the process that makes the product. Patents are supposed to help foster innovation for the benefit of the consumer and society as a whole. The innovator gets rewarded as a matter of course, but it's not the main purpose. If you make something marketable, then decide to rest on your laurels, then you deserve to get left behind by your competitors.

I hate to beat a dead horse, but look at Microsoft. They tried to protect their advantage instead of innovating. (Or they may have tried but simply failed in their attempts to innovate and execute.) If Apple ever starts along the same path, then they'll get the same results.

What keeps Coke defensible from Pepsi?

Sure, "execution" is a loaded word, but if you break it down, a successful startup is a magical combination of marketing, product, design, distribution, customer service, analytics, market knowledge, positioning, network effects etc. All of which, when executed well, strengthens and reinforces a brand that the end-consumer loves to rally around.

Your IP should be a means to this end, not the other way around.

Coke vs Pepsi? Patents and copyrights on the secret formula that makes it taste non-crap.

But the rest of your points stand.

Actually, Coke's formula isn't patented. Many say it's the best kept trade secret in the world. They keep competitors from copying them by keeping their recipe a secret.

Still, even if the recipe was known,there is a distinct Coca Cola experience that no competitor can copy. It's one of the most known brands in the world. If a competitor would sell his stuff which would taste exactly like Coca Cola the consumer still wouldn't get the status of drinking the real thing.

For startups I think the best advice is to stay relevant. Don't ever think you're done. Look at what happened to myspace.

Is it really that difficult to reverse engineer Coke's "formula"? I find it hard to believe that, with the tools we have today, no company could create an exact duplicate. Maybe the the real issue is that they could, but then couldn't reproduce the brand.

It doesn't matter what coke tastes like right now.

It's all about marketing and feeding people the stories that make them fuzzy and warm inside, knowing every time they drink a coke they are that much closer to the gates of heaven.

The taste of the actual beverage may have been a factor in the early days, not now. not with mass acceptance and a giant marketing push that has been engraved into the product/company.

For every Coca-Cola, there has to be a Pepsi to supplement the non-believers. Same is true in every business, and in case of Gowalla and Foursquare.

There is room for both of the companies to be thriving side by side.

The only answer is the culture behind a decision. If you're doing things right you are following a "plan" and solving a problem, a feature is your catch about a possible solution. If your competitors copy it, you did your work right, it means that you have a good knowledge of your userbase and generally of the domain. The problem will never be a competitor copying you, it's if a competitor implements your next feature before of you and the solution you're coming up with is the same. At that point, you're not managing the rules of the game anymore.

How about their customers/users or comprehensiveness of data? The biggest thing that stops me moving from Facebook to competitor X is that all my friends are on Facebook and not competitor X. Similarly, would you prefer to use Foursquare with stuff and people already in your city, or competitor Y in which your city is barren?

Of course this leaves many startups out, since this doesn't apply to them.

Why can't someone answer with "our team" or "they way we execute"? If your competitor is always a step behind you copying features you wrote last month, doesn't that guarantee that you'll always be ahead of them?

not much. some stuff is defensible, but generally, success seems to comes from being innovative and having a good team that executes well.

Reply on news.ycombinator.com