How to Formulate Your Unfair Advantage Strategy
How to Formulate Your Unfair Advantage Strategy
and defend your business model from copycats and competitors.
👋 Hi there - I’m Ash. I share battle-tested recipes, strategies, and how-tos for systematically building repeatable and scalable business models delivered to your inbox every week.
Paid subscribers get access to the full archive, a private community, and a masterclass.
Communicating defensibility against copycats and competition is critical when pitching your business model to investors and key stakeholders.
This is the job of the Unfair Advantage box on the Lean Canvas — and it’s one of the most challenging boxes to fill, especially at the outset of an idea.
Today, I’ll outline the characteristics of an unfair advantage, share sources of unfair advantages, and show you how to formulate your unfair advantage strategy.
Let’s dive in.
What is an Unfair Advantage?
A real unfair advantage is something that cannot be easily copied or bought.
- Jason Cohen
Examples:
insider information,
a dream team,
personal authority,
network effects,
scale economies,
etc.
Don’t Confuse Competitive Advantages With Unfair Advantages
A lot of people equate unfair advantages to competitive advantages. While related, they are not the same.
A competitive advantage is something that allows a company to deliver a better product than the competition.
Unfair advantages are competitive advantages but with the added properties of exclusivity and defensibility — which makes them unfair.
Some things like operational excellence that lead to better design and higher product development efficiencies can be competitive advantages but fail the unfair advantage “cannot be copied” test.
Other things like branding can be both a competitive and unfair advantage.
Example:
Design is one of Apple’s competitive advantages. But while good design is hard to create, it’s easy to copy. Apple’s real unfair advantages come from elsewhere.
Anything worth copying will be copied. If it can be easily copied or bought, it’s not defensible — making it not an unfair advantage.
What’s the Difference Between an Unfair Advantage and a Unique Value Proposition (UVP)?
These, too, can overlap, but they are different. It helps to differentiate them by who they are intended for.
The audience for a UVP is your customer. In contrast, the audience for an unfair advantage is your competitor.
The job of a UVP is to communicate to your customer why your product is better than the competition. In contrast, the job of an unfair advantage is to communicate to your competitor why they shouldn’t bother trying to copy your product.
Example:
iPhone UVP: A phone, PDA, and a music player in one.
iPhone Unfair Advantages: Branding, supply chain relationships (cornered resources), switching costs.
UVPs communicate better products. Unfair Advantages communicate defensible business models.