Startup companies start small but they have the potential to become global leaders. However, the path of growth is not always highly secure. Global giant Amazon was able to handle its loss in the initial years thanks to the investors who stayed by the side. But all the startup companies might not have a strong line of investors which makes them prone to risk. The global business landscape has become highly competitive and it requires taking secure steps to navigate through the market.
8 Effective Moats to Keep Your Startup Safe
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Network Effects
Network effects help to make a service or product more valuable as more customers start using it. It helps to create a self-enforcing loop that does not allow competitors to take advantage of your business. It can help a company popularize and establish a strong foundation in the market.
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Cost Advantages
Offering a cost advantage over the competitors can help to stay ahead in the game as the startups that charge lower than the competitors tend to make more sales in the niche. This considers the scale of the economy as well as supply chain management which is quite important for startups, especially at their initial stage. This can help to acquire dominance in a market that is already occupied.
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Power of Brand
Brand power can help to build a strong sense of loyalty among the customers and this trust cannot be broken by any strategies of the competitors. Personalized strategies and premium pricing can help develop a strong brand power which helps to embrace products and services.
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IP Patents
Intellectual properties and patents help to get legal protection against your company innovations which can be copied by the competitors. Trademarks and proprietary technology can also help in this case and it is important resistance to leaking data. For example, the biotech firms highly depend on the patents to protect their drug formulations. Such secured innovations also attract more investors.
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Cost Switching
Switching costs at the right time and at the right place can help to gain competitive advantages as customers are more likely to stay than switch to a competitor when it costs them more. Integrating an all-in-one platform like Salesforce is helpful for companies but it is also a problem when it comes to switching to a new platform. That is why creating deeply integrated solutions is important to retain customers.
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Exquisite Partnership
Strategic partnerships have saved many startups from falling into the ditch. Starting from key suppliers to distributors and the influencers in the niche industry; you need to create unique partnerships with everyone which benefits your overall company growth. For example, OpenAI’s executive partnership with Microsoft helped them to make quick AI developments. These partnerships cannot be easily replicated by the competitors.
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Advantage of Data
Startup companies can analyze proprietary data which can be easily accumulated from the market. It provides a competitive edge and better navigation in the market by finding the right people for your company. Platforms like Google, YouTube, Facebook, and other algorithm-driven platforms can help to gain such a big volume of data.
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Regulatory Barriers
Regulatory approvals can help to create strong entry barriers that are not easy for the competitors to penetrate. It is even more important for the fintech companies that deal with numerous monetary transactions every day. They must comply with the financial regulations which help to handle their resources better.
Utilize these aforementioned strategies to safeguard your startup company from any potential risk, both in the early stage and the established years of success.
