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how do you ensure a sustainable competitive advantage long enough to get a headstart?

I know that answers to this question will be too broad, so I’ll try to limit the scope a bit. I am specifically interested in web based applications/services startups. whereas the value or the product is a digital service that can be replicated by competitors, is there a special type of IPs or copyrights to maintain a competitive advantage or is there another way of doing this ?particularly in the initial stages while gaining users ?

Answer 5626

As intriguing as it may sound, the mere fact that you’re trying to gain users gives you a significant competitive advantage over most startups.

Really.

Most of them do something like this:

  1. Waste months developing something nobody wants
  2. Miserably fail big launch
  3. Brainstorm and revisit assumptions based on vague feedback
  4. Go to #1 and redo the same mistake

I’ve met a number of entrepreneurs that liked to think they were doing customer development and agile and what have you when the sorry reality is they’re not… (And frankly, I’m every bit as guilty as the next guy here.)

If you’re actively looking for clients from the get go and collecting solid input from the end-users you’re meeting, you’re probably building a product based on proper market research and sensible data – and therefor have a significant competitive advantage over your competitors.

You’ve little need for extra steps to protect your IP. Lawyers are expensive, so you probably can’t afford one in your startup’s early stages anyway – worry about that when you can afford it. Have a solid NDA until then for those occasions where you want to discuss truly sensitive information – which frankly, is rare because most information is not that sensitive – and call it a day.

Answer 5627

If what you are doing is unique enough you may be able to patent the business method. You can also patent the unique designs on the site. If there is a unique process in the code behind the site, that maybe patentable as well.

Patent enforcement is a difficult problem for a startup because

  1. Patenting in one country is not sufficient because your site can be accessed from all over. You can get an international patent that covers the WTO countries but those are pricey.
  2. Monitoring patents, advising on infringement and deciding to sue is an expensive process
  3. Suing is a time consuming and expensive process
  4. Patenting involves doing a thorough search for existing patents, creating good claims and even with a lawyer it is time consuming

It maybe an idea to just pursue with development and launch the product. You can use a non disclosure agreement during the test phases when you have to show your product to outsiders. After launch, a good tactic would be to do constant development so you have constant innovation. That way, your site would always be on the cutting edge and by the time somebody develops a copy of it, you would have evolved with new features or looks. You can keep this up until the product gains maturity and market recognition.

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