Building a Moat Around Your Business

Build a Moat

During our conversation at the New York Times Small Business Summit last week, we talked about this concept of building a moat around your business. Say for example you are in the design business. We just saw some very colorful new creations coming out of fashion week in New York and Milano. You're a designer and want to build a competitive advantage around your business.

You develop a concept, create the lines, choose the fabrics and materials, envision how it all goes together in the final product.

So that's step #1 — have a vision, and execute on that vision using your distinctive point of view.

Ground that execution in a core that is just yours. Which means you will need to trust your ability to see the idea come to fruition, want to put in the sweat equity to make it happen, and follow through to make sure it does. Along the way, you will probably need to translate what you see for others to help you make it tangible.

If you think that's easy, think again. The potential stumbling blocks here are the naysayers when you have your first idea, those people who will try to kill it before it 's even forming completely. They have their motivations. Some of them will do it to protect you form disappointment. Others will say things out of jealousy, or because they want to copy you along the way — and it's much easier to copy something that is not fully formed yet.

Which brings us to step #2 — direction. You do what you need to do to put the product in customers' hands.

I love to watch new fashions shows. They are still concepts on models that will be adapted and scaled for the market. It's still great to see the vision come to life, to see the creative direction.

The minute you ship, you're in business. At this point it's helpful to observe how people use your product, how they relate to your service, what needs improvement, what can use simplification, and so on. Talk to customers and prospects, hear what they have to say. Worry about that. Worry less about the competition.

When you do look at what your competitors are doing, do it with your own lens and point of view. So many businesses — small and large — make the mistake of taking the eye off the ball here. Your work has only begun when you start shipping. Build accountability into every process.

That also means step #3 — open a direct dialogue with the marketplace.

When it comes to fashion, we used to get wind of the new lines on TV, in print magazines, in media that removed us from the action in space and time. Even fashion designers are understanding the power of pull. If you have a passing interest you probably know that many of the recent shows where streamed live on Facebook.

You may not be in a glamorous business like fashion. Being able to stream your new product live to your customers and prospects, let them opt in product availability lists, you must admit, is a pretty appealing proposition. Everyone else might be doing it, just not like you. Because they don't have your vision and point of view, nor do they have the same direction.

All these steps are based upon your actions and behavior — they are directly related to how you are building a moat around your business. Your moat is your competitive advantage. It's what makes your product and your serve yours — without you, it's not the same.

You can build a moat — a competitive advantage — using content to become a useful filter like American Express OPEN, innovating before anyone else like Apple, simplifying a process and keeping it simple like 37 Signals, etc. How you architect your value proposition, what is different about you is a conversation about marketers and the fashion design business.

[image by Fozzeee]

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