When experienced entrepreneurs examine a new business opportunity, one of the major questions they ask is whether or not there are barriers to entry for other competition entering in the market.
I had mentioned watching Dragonse’ Den from the United Kingdom which is a television show about entrepreneurs pitching their business ideas to angel investors. Many of the investors are millionaires who built up their wealth through buiding up successful businesses themselves. They’re also known as Dragons due to their tough and hard-hitting questions.
Barriers to Entry for Social Business Opportunties
Well, one of the interesting commonalities about the investors is the fact that they consistently bring up the question of whether there are barriers to entry for a business opportunity. You’ll often hear the investors asking the budding entrepreneurs whether it will be tough for other competitors to copy their business idea. If the business is too easily duplicated, the investors will most likely refuse to invest.
I think that there is something valuable to learn from the experienced investors and successful entrepreneurs known as the Dragons.
Balancing Social Impact and Profitability
If you’re starting out your own social enterprise, a tricky and interesting part of social enterprise is the balance between social impact and profitability. Profitability is important because it leads to the sustainability and growth of the enterprise. Nevertheless, a significant part for achieving profitability is whether your enterprise has some competitive advantage or barriers to entry over other current enterprises and any upcoming enterprises that are in the same industry.
Social Entrepreneurs Who Are Inventors
On the Dragons’ Den show, many of the budding entrepreneurs are inventors. Some of them have actually invented products that help save lives. For instance, some of the innovative life-saving products included a water container and purifier for developing countries, a specialized seat belt for children in cars, and an easily built cement temporary shelter for humanitarian situations.
Protecting Your Social Innovations
For inventor entrepreneurs such as these, the Dragon investors ask them whether they have any protection for their ideas against any competition. The barriers to entry for such inventions are the patents, copyright and other intellectual property protections. Interestingly, many of the entrepreneurs had not applied for such protections, and the investors get absolutely disgusted when they find this out.
Your Social Enterprise’s Inventions as Intellectual Property
If you’re considering starting up your own social enterprise that is centred on a certain product that you’ve invented, be sure that you protect your ideas with intellectual property protections such as patent applications.