Excellent post on 'Barriers to Imitation' from Early Stage VC.
From the post: So what do we really mean when we say what’s your barrier to entry? I think what we mean is really the reciprocal. What’s everyone else’s obstacle to imitation? Competitive imitation erodes your uniqueness as in Unique Sales Proposition. It raises the cost of differentiation and it gives the customer more perceived choices. You have to spend more to stand out and get less market share for it.
Imitation comes in many forms. It can be a current claim, as is “we do the same thing.” It can be a future promise, as in “we will have that feature, too.” Worst of all, it can be a rapid replica of your actual product. It is the latter that most investors care about when they fear competitive “entry” or imitation.Re-casting the question as obstacle rather than barrier also points to how to address the issue. There is rarely a single obstacle that is so insurmountable as actually to be a barrier. However, you can often outline a series of speed bumps that will slow down even the fastest fast follower.