Top 3 Ways to Defend Your Brand From Copycats

Last week, Business Insider allowed me the opportunity to warn newbies that BigCo is absolutely scanning startup land continuously for ideas they can easily copy, even reverse engineer at a low technical expense.

Technical expense? Say what?

Ah, that’s the point I’m trying to make. BigCo is lazy.

So, if your formula is one of 25, your co-man can quickly crank it out. It doesn’t matter that you have a legal agreement with your co-manufacturer. ConAgra or Pepsi will easily be able to copy your thing. And will be highly attracted to doing so. They have world-class R&D facilities capable of doing this really, really well. And fast, if an executive lights a fire under their bureaucratic petards. 

So, how does an undercapitalized entrepreneur, the proverbial David, set up a business to prevent this?

  1. focus on a consumer problem that requires new production technology to solve commercially
  2. focus on a formula with gross margins below 40% (BigCo and venture capitalists will avoid like the plague); this is why refrigerated food startups are both rare (lack of funding) and have few competitors
  3. Build your own scalable pilot plant that becomes a key asset in any future transaction.

There’s a reason the market-leading brands today got that way. They were the first to commercialize the production of things like thin potato chips, sandwich cookies, butter crackers, etc. It’s complicated to mass-manufacture food and beverage. 

This is an advantage that cultured and plant-based meat alternatives have. Few are willing to invest in their proprietary production processes, but many are eager to fund them if the addressable market looks ginormous down the line.

Ultimately, BigCo is NOT your most critical enemy. Don’t worry about them. I have little faith they could ever incubate a new trademark that isn’t trafficking in yesterday’s cool thing. It’s a super shortlist – DiGiorno. Gold Peak. Activia (a European company). The reasons are political. If they take your ingredient idea and stick it into their existing brands, this only advertises your thing. As a premium brand, your audience will be very different, most likely.

But you can’t just make a complicated potato chip. Potato chips are not a fertile zone of innovation anymore. You need to tack back and forth between a commercially viable, defensible product AND one designed symbolically to command a premium

Dr. James Richardson

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