In a sense I feel building a business is building a moat around your app/technology. Google started with a search engine but gradually expanded to email, spreadsheets, blogging, advertising, etc. Once you got something that is solving a problem, make sure you build defensible products around it to ensure you remain the one solving that problem, and make it harder for others to enter that same area. Otherwise you're in trouble. Because building a rails app is something any geek can do. Building a defensible business is something not any regular Joe can, on the other hand.
Apples vs. oranges. "regular Joe" != "geek"
Sure, any geek can build that app, but most geeks won't build any kind of business. The number of people who are capable and motivated to both build a good app and also build a strong business around it is very small. Small enough that you shouldn't worry about them prematurely.
I don't really have a good feeling about this "defensible" business that people keep talking about. Competition is something that should be expected, not a reason to panic. In fact, I'd say the best way to start a business is to look at existing ones and compete with them along an axis where they are weak.
I used to like the moat idea of Buffett, but now I think it's more for mature businesses. Things like IP, brand, switching costs, channels, partners etc. As a war metaphor, it's a nasty, zero-sum game.
Defence is only part of the "business" - it's logically dependent on having something to defend. A moat around nothing is pointless.
There's a more insidious aspect: while thinking defensively, worried about how you could be attacked, you aren't out there enabling customers to solve their problems. It's not a fun way to be. But what is worse, is that the most effective way to build a moat (for a startup) is focus 100% on enabling customers to solve their problems: every person you help improves your brand [a moat]. Every product improvement (that better solves the customer problem) makes your product harder to copy [a moat]. If you learn about your customers, the details of what they need, how to solve it best given their situation, and how you could let them know about your solution, and what language they would most easily understand, then you are serving them, but because this takes time and effort to work out, it's also hard to copy [a moat].
If you serve them best If you look at the most successful companies, even mature ones, they are constantly trying to improve their product and improve their brand - in particular, technology companies like apple, microsoft, google; but it even includes mature consumer companies like colgate-palmolive, J&J, coca-cola, nike [new toothpaste; new coke flavours, bottle-sizes, advertising campaigns; new shoe "technology", design and advertising].
Be a knight, not a dragon.
By working out how to serve customers, you not only make money, but incidentally create a moat. But if you focus on making a moat, serving customers will be secondary to you, you'll make less money, and you'll make a less effective moat - with less for it to defend. This path leads to less success, deservedly so.
The only "sneaky" aspect I'd include is to be aware of your core business value (the expertise/knowledge above), and keep it to yourself. http://news.ycombinator.com/item?id=3267432
The business part is getting your solution to customers who need it, who then buy it:
First, they need to know your solution exists, through promotion, perhaps word of mouth. It helps to have a short, pithy, catchy way to explain the product, that can be quickly understood, be interesting, memorable: easy for one person to pass on to another, and a motive to do that. It's important to focus on the problem that people that it solves (rather than the solution), so a person can think "hey, that's just what Ed's been looking for. I'll pass it on".
They need to be able to assess it easily; try it out easily (to confirm it solves their problem); and buy it easily.
In other words: build something [app] people want [problem] - and get it to them [business].
TL;DR if we divide a startup into tech/biz, the biz part isn't building a moat. It's actually helping people.
This got me thinking about the $200,000 "shitty" Android app the government supposedly commissioned. With some slight rephrasing:
>> Next time you see a business build a "cheap & shitty app" and making loads of money - try to see what business is backing it up, and what problem it is solving instead of how bad or good it is technically.
A lot of folks were hung up on the fact that they can build it in 6 hours. But can they also test it in 6 hours? Write the requirements for it in 6 hours? Navigate the bureaucracy to get the project approved in 6 hours? That's why gun.io doesn't have government business -- they can't do the business side.
That IS the problem. They can't do the business side, but they SHOULD be able to do the business side. Government contracts favor large mega-corps rather than small, efficient businesses because of the enormous amount of regulations involved.
For better or worse, it's easier for a big bureaucracy (the government) to deal with other big bureaucracies (corporations), rather than micromanaging who is building what app for which department. It's not the most efficient, but it might be more efficient than immediate alternatives.
building app has started to become commodity, most of these are built over the weekend and left after that. What we need to understand is that user acquisition and retention are the most critical factors of the startups in this era. I don't want to go into negative but every hacker knows that we should build something that solves pain for the users and try to monetize that. And every weekend project submitted here seems to be solving some kind of problem at least for that particular niche market. But to grow such apps into business one needs to work on user acquisition, retention, building credibility and customer loyalty which can not be commoditized. These are completely different aspects of business than writing code and should be taken as serious and aggressive as writing code.
This is one of the primary values found in the essence of the lean startup movement. Customer development can not be overlooked. Business models can not be overlooked. Building apps is easy, building sustainable businesses is hard.
