Founder Insights #3: Defensibility
Welcome to the third edition of Founder Insights. This series brings you real-world lessons from founders. In our last edition, we explored how to find product-market fit. This time, we take a closer look at what it takes to build strong product defensibility. Product-market fit may get you in the door. But defensibility is what keeps you in the game. It’s what makes your product not just good, but hard to replicate, hard to replace, and increasingly valuable over time.
1. Economies of Scale
As companies scale, they gain efficiency by spreading fixed costs and streamlining operations, leading to higher margins. This enables them to offer better pricing and service, attracting more customers and reinforcing their advantage.
NinjaVan, a leading logistics company in Southeast Asia, benefits from economies of scale by reducing operational costs through route optimisation and bulk dispatch, which becomes more efficient as it grows.
2. Embedding
When a product is deeply embedded in a business workflow, it becomes critical to daily operations. Replacing it often requires retraining staff, migrating data, and risking downtime, making switching both costly and disruptive.
Xendit is a payment gateway solution that integrates into businesses’ sales processes. This tight integration makes switching providers costly and risky, giving Xendit high customer retention and a defensible market position.
3. Proprietary Data
Proprietary data helps increase revenues by personalizing the customer experience and antici-pating buying behavior. It optimizes advertising effectiveness for sellers by enabling more precise targeting.
As Southeast Asia’s largest e-commerce platform, Shopee leverages vast user data to personalize recommendations and target customers effectively, giving it an advertising edge that is hard to match.
4. Network Effects
The more users a two-sided platform accumu-lates, the more valuable it becomes to all stakeholders. Once winners start to emerge, it becomes hard for new players to overtake them.
Grab’s ride-hailing, delivery, and financial services became increasingly valuable as more users, drivers, and merchants joined the platform, making it a dominant SuperApp network across South-east Asia.
5. Brand
Strong brands earn customer trust through consistent quality, reliability, and emotional connection, making them the go-to choice. Even when new competitors enter the market, these brands retain loyalty by being top of mind.
YouTrip has become the preferred travel card for most Singaporeans by offering a multi-currency wallet with no foreign exchange fees and building a strong brand early, keeping it top of mind amid competition.
6. Intellectual Property
Strong intellectual property (IP) protects a company’s core technologies and processes, preserving its unique offerings and reinforcing its market leadership.
Datature is a no-code MLOps platform that streamlines the development of computer vision applications. Its sophisticated stack is difficult to replicate without deep expertise and substantial R&D investment.
Leave your thoughts on our LinkedIn Post! If you are a founder seeking Seed to Series A funding, we invite you to share your journey with us. Please submit your pitch deck through our website, and we will get back to you on the next step.
Written by Wayne Wee (Investment Associate)