To create high barriers to entry for your startup, you don't always need a complex idea, a cutting-edge technology, or a patent-worthy algorithm.
Instead, you can create high barriers the old-fashioned way: By being the first company to master the delivery of a thorny, logistically annoying job.
This, of course, is why small moving companies and cleaning services are always sprouting up in local markets. They do a crucial, tedious job faster than you could do it without them.
Then there's CampusTVs, which rents large flatscreens to college students for the entire school year. Talk about an easy-to-explain concept.
Why then, had no one done it yet? Mainly because it's difficult. Cofounder and CEO Scott Pirrello, 25, told David Harris in the Boston Business Journal (BBJ): "It's a massive logistical operation to coordinate this at a nationwide scale. It's a huge barrier to entry."
Those difficulties, as Harris points out, include:
- Storing the TVs in warehouses near a campus.
- Delivering the TVs using students who are paid by the company.
- Handling payments, installations, and customer service.
- Taking the TVs back to the warehouse.
Now imagine managing all of that on 50 campuses. That's what CampusTVs did last year. This fall, notes the BBJ, the company will expand to 300 college and university campuses.
Investors are noticing. CampusTVs has raised $2.2 million in funding, led by Boston-based Nauta Capital.
How hard is it, penetrating the college market? Innovation guru Scott D. Anthony, a managing partner at Clayton Christensen's vaunted Innosight consultancy, tells a story in his forthcoming book, The First Mile, about an established company targeting the universities market with a beverage dispenser. Traditionally, this company had sold its wares through mass-market retailers. It had no experience "cracking" the university market.
The sales team assumed it would take about three months.
Had they operated on that three-month assumption, they would've been left high and dry. Luckily for them, one member of the team picked up the phone and called a friend who sold security solutions to universities. The friend revealed that sales cycles for schools sometimes last as long as three years.
The point is, it's no small feat to sell anything on college campuses. So far, CampusTVs is off to a promising start. Moreover, their agreements make them the exclusive provider of rental TVs to the schools. Their road ahead won't be easy, but they've certainly cleared--and created--some daunting barriers, here at the start.