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67. Startups Shouldn’t Solve Technically Hard Problems
A breakthrough is not a moat if well-funded competitors can copy it once demonstrated.
Technical difficulty creates risk during invention but may offer little protection afterward. Patents are often narrow, expensive to enforce, and easy to work around, leaving a startup that proved a useful solution exposed to larger competitors. Healthcare is a notable exception because regulation and clinical timelines can preserve the first mover’s lead.
Evaluate the moat after the innovation becomes public. If replication is straightforward, add business defenses such as distribution, contracts, data, brand, regulation, or network effects—or reconsider whether a startup is the right institution to fund the science. Social value and investable return are not the same test.
No original chapter graphic was published with this essay. Model by Paras Chopra. Read the source chapter.