A moat can be unique technology, an exclusive licensing agreement, an exclusive IP (patent or otherwise), very unique experience or insight, an exclusive geographic location, a very unique business model, a very unique skill and/or reputation, etc.

Follow the leader seems like a plan, but it’s probably not a good plan unless you have tons of money to spend on marketing and sales.

In my previous home city, someone opened a bake shop with coffee that was targeted at the growing Korean population. It was unique: Korean pastries, Korean friendly faces, great coffee, etc. They probably invested $100k in opening this shop. It became very popular. Then, in about nine months, five more copycat shops opened up within a mile or two of this store. Result: business went way down for all of them. They all lost revenue, and they all invested a lot of money.

Software is prone to this kind of copycat behavior. The thinking goes like one of these two sequences:

1. People like software—>I write software—->People like [note apps, for example]—>I can write a note app in a week—->I’ll start a SaaS business

2. I write software—->I think [fill in the blank] is cool—>I will write an app for [that] in a week—->I’ll start a SaaS business

Writing software is not a differentiator. It’s not a shortcut to big bucks. It’s not a solution in itself. It’s just a tool. Anything you can write in a week (or 3 months) can be done by 100,000 other people—-in a week (or 3 months).

You have to start with a problem, defined by a large group of people, that you have the experience and expertise to solve in a unique and valuable way. Software may be part of that solution, but it’s just a fraction of the whole pie. You need to think about the whole solution—-and the moat. It may take 5 to 10 years to develop your moat. Be patient and be observant.

Good luck.