Intellectual property

Traditional businesses are obsessed with digging moats. The thought process is this: if your idea is good, people will try to copy you. You can't stop them, so you just make it really hard to do. Intellectual property is probably the biggest component of a good defensible business. Whether you have patents, copyrights, or just private source code, that's your moat. Protect the castle at all costs.

In the past few decades, there have been lots of businesses that basically give everything they've built away for free. Wordpress is a great example of this. The company built a great piece of website software that anyone can download and run on their server for free. You just have to pay for the server. They make money by offering easy-to-use Wordpress website hosting and a few premium paid plugins. You don't have to use their paid offerings, but enough do that it's a sustainable business model for them.

The benefit of this model is that it encourages a community of developers, hosting providers, consultants, designers, users, etc. to build with and contribute to your software. You don't even have to pay them for their time.

But how do you defend this business? Anyone can come in and do exactly what you're doing with your software. The key differentiator is your brand. You built the thing, so you're the expert.

Blockchain-based businesses are the same. The core of your applications is deployed to the blockchain. Anyone can copy you or use your creation in a way you didn't intend. You can even hand over the keys to a community of token holders. Any upgrades you would want to make would have to be approved through a vote of token holders.

If you're used to protecting your intellectual property, this may sound crazy, but the benefits of having a vibrant, passionate, invested community far outweigh the risks.

That's better than any moat.

​

More tomorrow,

-Luke

​

P.S. The key is your brand. Be first to market and nurture your community.

​