Be An Executioner, Part 4: Develop Your Moat

First used in 14th century Europe, a moat is a trench of water that surrounds a structure to provide a preliminary line of defense.  Moats keep people away and discourage close-range attacks, and even if an attempt is made, it’s a difficult structure to overcome.

Your moat is the defense system of your execution strategy.  Without developing a moat, your idea and team will far apart.  The thing is, moats typically don’t require a large amount of time or money.  Of course, this factor is often dependent on the extent of your intellectual property needs.

Intellectual property includes copyrights, patents, trademarks which grant exclusive rights to the creator(s).  Now, I’m not going to bore you with a lesson on intellectual property (trust me; I’ve sat through many lectures and they are boring), but you can read the Wikipedia for each and decide if you need one.

Chances are, in the very early stage of your venture you won’t need to file for IP yet, but it’s something to consider as you move on.  If you are working with a proprietary technology and it’s patentable, it will make you much more attractive to investors if they know you have a defense strategy.  A solid patent on your technology is a sign for competitors to stay away.  It also shows keen responsibility on the part of the management team.

Besides the legal aspects of protecting your venture, there are other ways to develop your defense system.  One of these is heavy duty questioning.  And guess what?  This means sharing your idea.  Yes, this is okay, as long as you share it with the right people.  Share your idea (always with a momentum strategy) to those that will provide you with constructive and applicable feedback.

The feedback you want to begin collecting should be from those with an established opinion in your respective field, but you also want to consider outside perspective, specifically of potential customers.  The questioning and feedback collection for your business will plug up holes (or prove major weaknesses), so you can close up shop (if you have to) before things get too expensive, or be aware of various fallacies early in your venture time line.

Finally, part of developing your moat is to always be up-to-date on your industry and competition.  Read blogs and trade magazines on your field.  Set-up Google Alerts for various buzz words that relate to your business and competition.  Use Twitter Search to see what people are saying about your business and competition, and subscribe to it via RSS.  These may seem obvious, but there are plenty of entrepreneurs I speak to who fail to do it.  Part of a successful defense strategy is simply knowing more than your opponent does.

A few other things to consider:

People will always try to screw you: There are organizations known as Patent Trolls that register patents with no intent to invent.  Their goal is to sue your business for patent infringement on the patent they are sitting on.  If this is something you are concerned about, there are defenses.

Utilize free online tools: Google has a service known as Google Patents where you can search the entire catalog of the United States Patent and Trademark Office.

Starting a virtual company? The state of Vermont is set to become the first in the nation to offer a legal framework for virtual companies.  This could save you a lot of money.

Working with exclusive digital rights? An actual distinction between ‘Copy’ vs ‘Performance’ of music no longer exists.  Exclusive rights to ‘make copies’ is becoming impossible to enforce (via Gerd Leonhard).

Related Essays

• Pitching Value
• Where Business Plans Go Wrong
• Avoiding The Value Dilemma

• « Be An Executioner, Part 3: Gaining Momentum
• » Weekly Reading 1/10

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