Start with a counterfactual with nobody in the market, run the numbers on what it would look like if it were true, and then manage the demand to fullfill it. Politicians are similar. They manage donors off voters, where their real promises are to the donors, and the story and hope is what they sell to voters. Makers make, but managers manage, and I don't think most of us on the maker side really have an apprehension of what managing actually is.
The Perfect Business (2014) [pdf]
31–38 of 38 posts
Re: The Perfect Business (2014) [pdf]
#32Re: The Perfect Business (2014) [pdf]
#33Earlier quoted context omitted.
At the time, we didn't know where else to get $500K-$1.5M. Turns out $220K and some pain and hustling was enough. Thank God the fundamentals are really sound and upside is really there. Now we're more looking into nondilutive funding and our lines of credit are burgeoning so it's possible VC won't be needed altogether. Not ready to close the door yet though, especially to the most selective programs and institutions…
Why can't you fund the business out of cash flow?
Re: The Perfect Business (2014) [pdf]
#34>>(3) The ideal business sells a product which cannot be easily substituted or copied. This means that the product is an original or at least it's something that can be copyrighted or patented. The principle is excellent, but the concept of protecting your product with patents is entirely invalid since about 2001 when China was admitted into the WTO. I have personal knowledge of several, and I can't count the number…
Re: The Perfect Business (2014) [pdf]
#35I spent a long time thinking about business like this after a decade and a half of hard knocks in SaaS and marketplaces where I simply hadn't been thinking clearly at all. That's how we came up with Best Parents (www.bestparents.com) in 2020. It's the first marketplace for high-end, in person, short courses and travel experiences for teenagers worldwide. My wife has expertise in the education sales industry from Turk…
Re: The Perfect Business (2014) [pdf]
#36Re: The Perfect Business (2014) [pdf]
#37>>(3) The ideal business sells a product which cannot be easily substituted or copied. This means that the product is an original or at least it's something that can be copyrighted or patented. The principle is excellent, but the concept of protecting your product with patents is entirely invalid since about 2001 when China was admitted into the WTO. I have personal knowledge of several, and I can't count the number…
Even if you can't sue Chinese manufacturers violating patents, very few products are bought directly from China then shipped to the USA. There are USA middlemen and retailers involved. Why couldn't a patent holder go after the USA middlemen in court?
But:
First, it is very hard to get an early preliminary injunction to halt sales, so they keep selling against you the whole time.
Second, the costs of pursuing a federal lawsuit are huge (typically six-figures+), it takes years to get to a judgement, and the result may be a pyrrhic victory where you are awarded damages and a cease-&-desist on a company that simply goes bankrupt and reorganizes under some other corp. entity.
Sure, if they got into a major US retailer instead of you, you might get something, but then you are still going up against not only the competitor's attnys but also the major retailers, so probably add a zero to the left of the decimal in your legal costs.
IOW, they still stole your IP, undermined your market, made money off of it, and suffered minimal penalties for doing so.
We should also notice that SpaceX explicitly stated that they are going the trade secret route vs patents, and said that patents would simply be treated by the Chinese like an instruction manual, and they could never stop them or recover anything.
Re: The Perfect Business (2014) [pdf]
#38Earlier quoted context omitted.
True, it only misses to meet number 3 (it's easily copied and just getting cheaper to build software as technology advances). I think the document also misses to mention saturation of the market, which software is also very saturated and this makes it hard for new businesses to get going...
The only thing I can think of that would prevent easy copying in the SaaS world would be to have most or all of your data generated by users, and then doggedly protecting that data from scraping, and/or hiding it behind a login. Otherwise, if your business relies on scraping other peoples data and then presenting a nice UI around that, it could just as easily be replicated by others (no moat, as we're saying nowadays…
And even behind a login can still be scraped. (The proverbial "If I can do it anyone can" applies here along with "where there is a will there's a way")