<Venture Capital, Barriers to Entry>

<Introduction>

• What stops your competiton from breaking into your markets?
• What about competiton that doesn't even exist yet?
• Is this a breach of EU Competition law?

Everyone loves a monopoly and any industry which requires massive investment, special licenses, difficult R&D, etc. will be a preferred candidate for funding because these are more stable markets (for a while!), as its impossible to be suddenly buried by a new, rich competitor (think Americans). Maybe this is impossible but there's plenty we've seen which can help secure your position.

<Why's Obvious but How?>

First mover advantage they call it in the States. Though not always true (think Barnes and Noble vs Amazon!), it is always an advantage to get in first and build up a brand. Anyone else is then fighting an uphill battle.

An easy way to see if this is true is to ask yourself - "how hard is everything I'm doing". The more sweat, tears and headaches that have gone into your plan the worse life will be for a later entrant. This will in itself put many people off.

Target a niche. The more specialised your site or plan the less room there is for competiton. ISP's are now having to tailor their offerings to specific markets. The average virtual ISP was too generic and huge numbers of now near bankrupt people with "ideas" got stung as everything opened up. People with dial-up aimed at specific areas such as Doctors or their existing client base fared much better.

One thing we have learnt is that local content makes life difficult for an intruder. American firms know that they will always have difficulty truly cracking the UK market for the same reason that US papers don't sell well over here. They've got a cultural barrier preventing their entry. Providing local information and flavour as part of your marketing and site plan can make a plan.