KoiTip #26 - Protect Yourself with Icebergs
You have a great idea and have developed a product. Now you want to protect it.
When I ask entrepreneurs how they will do this, they usually talk about patents and continually improving their technology.
They're focusing on the wrong thing - the tip of the iceberg only.
Beneath the tip (the technology) there is potentially a whole world of competitive advantage. Let's explore three such icebergs:
The Suppliers/Supply Relationships Iceberg. The success of many products rests on an intricate, complex web of commercial relationships.
When Hannes and I cofounded Fundamo, a mobile payments company, he immediately began building our web of relationships with banks, mobile operators, systems integrators, regulators and others. Without this our technology would never have succeeded.
The Systems Iceberg. Your core product needs to be complemented by a wide range of other services and systems - training, pre and post-sales support, systems integrators, user communities, etc. I call these the "petals" of the "flower" - more about this strategy here.
The Brand Iceberg. Does your company stand for more than its products? Do you have an ethos, a passion, a purpose, a vision that draws people to your brand?
Apple had no new innovative products throughout the early 2000's, yet people continued to enthusiastically buy their products - because they were passionate about the Apple brand.
Embrace the Iceberg
Many of the entrepreneurs I work with are fixated only on their technology - and do not realise that the value of most companies lies in the rest of the iceberg.
An angel investor in Pretoria retained me last year to advise him on whether to invest in an ecommerce startup. My sessions with the founder showed that he was only interested in the technology, and showed no appreciation for the vital importance of supplier relationships. The angel declined to invest in the venture.
Why is this? Founders who are techies are often blind to or uncomfortable with areas beyond their expertise. They need to build a team that has these skills - read how to do this.
I hope this helps you build