End of defensibility

Freshness Warning
This article is over 10 years old. It's possible that the information you read below isn't current.

Union Square Ventures' Charlie O'Donnell was having trouble explaining how some of his investments had defensible businesses. It occurred to him that perhaps defensibility is a flawed concept.

What is a defensible business anyway? Last time I checked, we lived in a free country with a government that promotes competition and curbs monopolistic behavior. Any customer of a company can choose to stop being a customer at anytime, right? Now, perhaps switching costs are high, but I would argue that they are capped to the degree that customers would be unwilling to sign up for a product whose switching costs were so high that, in the event of poor performance, they could not afford to leave.

And even if you think you have a good defense, are you defending the business, or the technology?

We saw a lot of late stage VC deals whose "barrier to entry" was that they were the only ones who had a certain technology. However, we started to realize .. that pure technology advantage was a fleeting notion. Maybe you were, in fact, the only ones with a technology, but that doesn’t mean you were the only ones with the solution. In other words, there are always many ways to skin a cat.

A while back I talked to a patent attorney who pointed out that a great many ideas are patentable, but those patents are likely to be useless in a business. You patent the technology, and then someone comes along and solves the same problem in a different way.

Andrew Parker
October 9, 2007 8:09 AM

Charlie wrote that post early in his tenure at Union Square Ventures. After that conversation, this is our new stance on defensibility: http://www.unionsquareventures.com/2006/08/defensibility.html Hope you find that interesting.

Your comments:

Text only, no HTML. URLs will automatically be converted to links. Your email address is required, but it will not be displayed on the site.

Name:

Not your company or your SEO link. Comments without a real name will be deleted as spam.

Email: (not displayed)

If you don't feel comfortable giving me your real email address, don't expect me to feel comfortable publishing your comment.

Website (optional):

Follow me on Twitter

Best Of

  • How not to apply for a job Applying for a job isn't that hard, but it does take some minimal effort and common sense.
  • Simplified Form Errors One of the most frustrating experiences on the Web is filling out forms. When mistakes are made, the user is often left guessing what they need to correct. We've taken an approach that shows the user in no uncertain terms what needs to be fixed.
  • The best of 2006 I wrote a lot of drivel in 2006. Here's the things that are less crappy than the rest.
  • Rounded corners in CSS There lots of ways to create rounded corners with CSS, but they always require lots of complex HTML and CSS. This is simpler.
  • Debunking predictions Read/Write Web's authors have some goofy predictions.
  • More of the best »

Recently Read

Get More

Subscribe | Archives

10

Recently

Physical camera shutter for Cisco Spark Board (Jul 6)
A 3d printable design for a camera shutter for a Cisco Spark Board
My Travel Coffee Setup (Jan 20)
What my travel coffee brewing setup looks like, and how you can build your own for under $100.
Turkey Legs (May 30)
Product naming gone awry.
Speaking for Geeks: Your Slides (Dec 17)
Tips and tricks for creating great slides.
Speaking for Geeks: Writing Your Talk (Dec 14)
Don’t wait until the night before the talk to write it. Crazy, I know.
Speaking for Geeks: Tell a Story (Dec 13)
Telling a story keeps your presentation focused, keeps your audience interested, and makes it easier for you to remember your talk.
Speaking for Geeks: Where to speak (Dec 11)
You've got a great idea for a talk. How do you find conferences to submit it to?
Speaking for Geeks: Getting your session accepted (Dec 10)
Your conference speaking submissions are not getting accepted because they're bad. Here's how to make them better.

Subscribe to this site's feed.

Elsewhere

Tropo
Voice and communications platforms, including Tropo and Phono. Work.
SacStarts
The Sacramento technology startup community.
Pinewood Freak
Pinewood Derby tips and tricks

Contact

Adam Kalsey

Mobile: 916.600.2497

Email: adam AT kalsey.com

AIM or Skype: akalsey

Resume

PGP Key

©1999-2017 Adam Kalsey.
Content management by Movable Type.