Defensibility & Competition: Designing a Better Thinking-Writing Medium

Defensibility & Competition: Designing a Better Thinking-Writing Medium

In the world of startups, defensibility is a crucial aspect that determines the success and longevity of a company. While some startups are fortunate enough to have defensibility built into their business model from the start, the majority need to add defensibility over time. One of the few forms of defensibility that can arise immediately upon launch is network effects.

Network effects occur when the value of a product or service increases as more people use it. For example, social media platforms like Facebook and Instagram become more valuable to users as their friends and connections join the platform. This creates a moat around the company, making it difficult for competitors to enter the market and replicate the network effects.

Another form of defensibility is the platform effect. Certain SaaS or operating system companies benefit from this effect. Salesforce, for instance, is a sticky product because many other companies have integrated their systems with it. This bundling and cross-selling of products prevent competitors from finding a wedge to compete with Salesforce, as it offers superior interoperability, pricing, and procurement processes.

Early access to APIs, data, or other unique assets can also provide a competitive advantage. For example, OpenAI has provided some companies with early access to GPT-4, a language model that can generate human-like text. This gives those companies an edge over their competitors who do not have access to such advanced technology.

Sales can also act as a moat for SaaS or enterprise companies. Having unique or proprietary data, or owning a customer's data, can create defensibility. Being a "system of record" for a user or entity is a powerful position to be in. Additionally, speed of iteration and execution, responsiveness to customer requests, and speed of hiring and closing candidates are all advantages that can contribute to defensibility.

Interestingly, speed itself can be an advantage over other startups. Many teams struggle to execute at high levels consistently, giving startups that can consistently deliver at a fast pace a competitive edge. As Jeff Bezos famously said, "Your margin is my opportunity," indicating that being quick to enter new markets can give a company a significant advantage.

Good startup ideas often seem small, niche, or toy-like. Only those who are desperate enough or have a unique vision will go and build in these areas, as they may initially appear too small of a market or use case for large incumbents. However, it is important to note that bitter founder companies tend to fail. Instead of solely focusing on defensibility, serving a customer need well is often more important and harder to achieve.

Defensibility can emerge over time, especially if a company builds out a proprietary data set, becomes an ingrained workflow, or creates defensibility through sales or other moats. The less a company invests in building and expanding the product after launch, the more vulnerable it becomes to other startups or incumbents eventually commoditizing their offering. Thus, the pace of execution and ongoing shipping post-v1 matter greatly in building defensibility.

Now, let's shift our focus to a different but related topic - designing a better thinking-writing medium. Writing is not just a record of our thoughts; it is also the medium through which we think. Richard Feynman argued that writing enabled him to think more consciously and articulate his ideas more clearly.

Our brains are naturally good at thinking in the moment, but when it comes to thinking over time, especially across days, weeks, and months, we often struggle to retain and connect our thoughts. This is where writing becomes a powerful tool for better thinking. When we take notes, we externalize our thoughts onto paper, allowing us to hold onto them even when they are not at the forefront of our minds.

Writing enables us to lay out a multitude of ideas, move them around, and connect them easily. It provides us with a visual representation of our thoughts, allowing us to jump between them and explore them at our leisure. Each time we write, we create a small room for our thoughts, freeing up mental space and enabling us to think more deeply.

When it comes to designing a tool for better thinking and writing, it is essential to distinguish between tools and mediums. Chris Granger defines a tool as something that makes an existing workflow more efficient, while a medium gives us new agency or power to do something we couldn't do before.

To create a thinking-writing medium, we need to go beyond just improving the efficiency of existing workflows. We must develop a tool that empowers users to think and express their ideas in new and transformative ways. By combining the power of writing with innovative features and functionalities, we can unlock new levels of creativity and clarity in our thinking process.

In conclusion, both defensibility and designing a better thinking-writing medium are crucial aspects in the startup world. Defensibility is necessary for long-term success and can be achieved through network effects, platform effects, early access to unique assets, sales-driven moats, and speed of execution. On the other hand, a thinking-writing medium can enhance our ability to think across time, organize and connect our thoughts, and ultimately lead to clearer and more impactful ideas.

To apply these concepts to your own startup or personal growth, here are three actionable pieces of advice:

1. Identify and leverage your unique assets: Whether it's proprietary data, early access to cutting-edge technology, or a strong sales-driven approach, identify what sets you apart from your competitors and use it to build defensibility.

2. Prioritize speed and execution: Consistently delivering at a fast pace can give you a significant advantage over other startups. Focus on building a culture of speed and responsiveness within your team.

3. Embrace a thinking-writing medium: Incorporate writing into your thinking process by using tools and mediums that allow you to lay out, organize, and connect your thoughts easily. Experiment with different mediums, such as digital note-taking apps or mind-mapping tools, to find what works best for you.

By combining defensibility strategies with the power of a thinking-writing medium, you can position yourself and your startup for long-term success and innovation. Remember, building defensibility takes time and effort, and refining your thinking and writing processes is an ongoing journey. Stay open to new ideas and adapt your strategies as needed to stay ahead in a competitive landscape.