Building a Moat Into a Startup

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Startups in the early days have little to protect the business beyond intellectual property.

As the company grows, the startup can build a stronger moat.

Here are some key steps for building a moat into a startup:

Network effects -- grow the network within your customer base to strengthen the business.

Design the product and the marketing to connect others to the customer base.

Platforms -- design a platform into the solution offered.

A platform brings reduced cost and greater capabilities versus one-off products.

Integrate with partners -- use APIs and other technical connections to create a seamless solution for customers.

Integrations add value and are difficult to compete against.

Bundle products -- package several services into a single product.

Through bundling, one creates a better solution that appeals to a broader audience.

Long-term sales contracts -- signing long-term contracts provides a moat.

Customers who want to switch will find it costly, and competitors will get tired of waiting for the customer to come back to the table.

Proprietary data -- data that is unique to the business adds value.

Unique data can be mined for additional products and services.

Brand -- build a brand that provides a unique promise to the customer.

Brands take time to build but can provide an additional moat for the company.

Consider these steps in building a moat into your startup.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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