Lesson 4a: Defensibility Is Connection

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All right, it's four in the morning right now, been up since 2 a.m. working on Defensibility. So we need to have a conversation about Defensibility, everybody. We just do.

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It's on the minds of everybody these days in the technology industry, for good reason. The reason is because people like to copy stuff. People who invent things and make things and, you know, create something completely unique that hasn't existed before, others like to copy it.

And they take all that hard-won R&D and the pain and suffering of invention and they skip past it and they copy it because they see something that they couldn't do in a million lifetimes. And they see you be successful with it and they just want to cut straight to it and just do a cash grab, take some of that money. Damn the artistry, right? Damn what it took for you to get there.

So they copy it. So investors, obviously, don't want to take that risk. Makes sense.

So we spend a lot of time thinking about Defensibility. We spend a lot of time analyzing it. Heck, we spend a gigantic amount of time having conversations with very sophisticated investors and capital allocators and private equity investment committees, other technologists, talking about Defensibility.

How big of a moat is wrapped around your product, your service, your business, your company? So when I invest in it, that subscription fee that people are paying, customers are paying, doesn't erode over time and just get stolen by competitors who are just like copycats. So what do you do about it? Well, I think we need to look to the fashion industry for advice. The fashion industry has been dealing with this for all time, right? Because fashion is so, I mean, look at fast fashion.

Shein, Zara, they basically just take what these amazing creative directors and designers do and they rip it off and they make a million of them for 10 bucks and they push it out on the internet and people buy it because they like the silhouette, they like the design, they like the feeling, they don't like the luxury prices. So they don't get the fabric, they don't get the full experience. You go to Chinatown in New York, you can pick up a Louis Vuitton bag or a fake Rolex and enjoy that.

But it is in some ways a gateway drug because you know that you don't have the real thing that you just spent a bunch of money on. You just don't. So what do we do about this? Well, there's this interesting idea, which is if you're so great, and we've had our shirts stolen too, if you're so great, why can't you do it again? Are you all out of ideas? Do you have no more creative ideas in that brain of yours? No more capability? And with gen AI ripping off everything, then it becomes a real problem.

So back to craftsmanship. Craftsmanship and you, to me, there are really only three primary defensible things that are durable. It's the beginning, the middle, and the end.

The beginning starts with you, like you on the other side of this phone. No one can copy you. You have a unique set of experiences.

The other side is brand. New York Yankees, right? No matter what you do, you can copy a logo, but you can't copy the New York Yankees American baseball team brand. It's a bellwether brand.

It's not going anywhere, right? I don't go to a AAA pickup ball game or one down the street that somebody that just started yesterday and think that I'm going to watch the Yankees play like where Babe Ruth played, right? Like in a stadium with professional baseball players. That's a brand. You can't copy the brand.

You can't copy the brand of Apple. You can copy their technology, Samsung looking at you, but you can't copy the brand and what they stand for, creation, like craftsmanship, a deep love for great, building great products inside out, what you see and don't see. You can't copy Disney and Mickey Mouse.

Like you can't copy Pixar. You can make another animated film. You can make a live action or animated film, but it's not Mickey Mouse.

You know what I mean? So that's important. And then like the network effect, the community around it, you will get super fans. And as long as you treat them with respect and love and admiration, you stay true to that creation spirit and those brand values, they can't copy you.

So today with vibe coding, with AI, you could just upload a bunch of images of a Chanel suit and, you know, like pay like a master. So pattern maker. Right.

And you could create a duplicate, but it's not going to be Gabrielle Chanel brand in Paris. Right. Like the store.

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So really the question I think that we have to answer as inventors, operators, investors, capital allocators is really who's helming the ship and who is creating new novel product experiences? Who cares about craftsmanship? Because people can feel it and you can see and understand only so much through the lens of this phone. But when you get something in your hand, that touch, that hand feel like you immediately understand whether something was produced with love or not. You take a bite of a piece of food.

You can taste the like artificial ingredients versus something's fresh. Right. Was created with care like the presentation.

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You understand and that you can't copy quality. Quality is such an unimportant element and so hard to put your finger on. But that human nature as we get more repeatable and copyable, the thing that you can create that's uniquely from your perspective, that's like weird, off-putting, maybe politically incorrect, like doesn't look like anything else.

At first you're like because it feels jagged and rough and it hits you in a way that you're not used to. It's a scroll stopper. That's defensibility.

Can you come up with creative shit from your noggin and put it out there and it interacts in a certain way? It's a different experience. It makes you feel something unique, not happy. Coke got the generic happy brand.

What's with this generic feeling? Give me a feeling where a human being has to hold three different feelings simultaneously in their gut, their heart, their head, their stomach, their mouth's dry. What is that feeling? Capture that feeling in an experience, in a product, in a service and deliver that to the and do it at scale. You can't copy that.

You can't copy very niche-specific, strong core values about a love, a desire, a perspective from someone else when you just like rip off a piece of like an article of clothing, like an application. You can get maybe a mechanic, you can get a like an interface, but you can't copy a soul, right? And that soul is what you put into these things and that soul comes from the human, from the animal, comes from nature, comes from something raw, something real. It doesn't come from the TikTok or the Instagram feed.

It doesn't come from what like 10 million people have thumbsed up or liked or hearted online. It comes from something unique, a one-of-one that you can't recreate in totality. That is defensibility.

Core values are defensibility at its strongest, especially when it's unique, especially when you've fought for something and you've been damaged because of it. Because no one can take you off that path. So if you're out here doing, trying to do like these creative analyses and like logical analyses and you've read like the seven laws of power and the 48 laws of power and Porter's seven forces and yada yada and the four Ps and you're like looking at nuance and like buttons and snaps and like word marks and logos and all of this shit, you've completely missed the point.

You're too, you're too enamored and you've lost the forest through the trees on the detail. The details all add up for sure, but in the mind of that customer, in the mind of that creator, there's a connection that's created. So better to analyze that connective tissue.

How strong is that personal connection between the creator and the consumer, the creator and the critic, the creator and the market, the one, the group, the team, the entity, the perspective, and that rawness. And if you're running market research studies, there's a place for that. I love it.

You need to get inside the mind of the consumer sometimes to understand how they're feeling. What are y'all rocking with? What's on your mind? Like what are you struggling with? So that we can create things that help. But you also got to come at it from a, we ain't doing no more committees.

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We're not doing any more research projects. We're going out in the wilderness and we're going to create something raw and true from ourselves. That's different, right? That's unique.

That didn't come from like interviewing a bunch of people, which anyone can do. That's not defensible. If you go out and you interview a bunch of people about like why they like a thing or an experience, they're going to give you similar answers.

Everyone has access to that. That's not defensible or differentiated. That's just more of the same.

It's stamp and repeat, which means the only thing left, the only thing that matters is that connection point from core values and raw true creation over and over again, that consistency over long time horizons that builds a brand and that brand becomes strong and that brand outlasts the creator. And other people can screw that brand up, mess up the house codes, whatever you want to call it. But those core values, example, Apple, Steve Jobs left, tanked, too many products, a bunch of crap they put out, shitty leaders, that leaked from the top.

And then it was like you interview the people and it's like, why were the great people still there? I still bleed in six colors. Yes, because they're involved in the principles. They still believe in the principles and the core values and that creative spirit.

So defensibility, what are we going to do about it? What are we going to do about it, guys? Um, where's the connection point? How strong is that connection point? Are you investing in the connection point? What is that between the buyer and the seller, the creator and the consumer, the enterprise buyer and the enterprise software company, for example? Where's the connection? That's a human thing. AI can speed it up, scale it up, make it more efficient. But they're they're not going to come at you with that connection.

That's still in the human realm, animal realm, nature realm, still in this like magical element of real. And so you need both if you want to be successful. But the alpha and the omega is that real connection point.

So you just got to you got to figure out what's right for you and where you're going to be making these decision points. And I would hearken and really stress that you need to go deep. You need to go deep, man and ladies in these connection points, understand them, analyze them, go deep in the brand values.

Are they true to them? What about the people involved? Are they doing it? What's going on with this stuff? So, yeah, that's it today. Keep it real. Get some rest.

And remember, defensibility starts with core values, adds up to something you can't copy, which is a brand. So, yeah, let's go make some art. Enjoy your coffee.

Have a good day. We'll talk at you. Peace.