This week I had several meetings and conversations with a brilliant young entrepreneur named Eric Durtschi. Eric is the CEO of a company called Crio Bru that won the top entrepreneur award in the state of Utah this last year.
Yesterday as I sat in Eric’s office he looked at me and, with total heaviness in his eyes, said, “This was hard. This was so hard I really wanted to give up multiple times.” My response was, “Great! That’s wonderful! That’s good!” Now why would I say that? One of my favorite models I use to quickly analyze a business’ viability and sustainability is Michael E. Porter’s Five Forces Model.
The most critical assessment portion is the central box and it is known as Barriers to Entry. Barriers to Entry is one way to measure how easy or difficult it would be for someone to copy and start up a business exactly like yours. The more Barriers to Entry you have implemented in your company the harder it will be for copycats to muscle in on your profits. How hard have you made it to start or get into your type of company?
The trick to having a sustainable, long-term viable business is to have barriers that you can cross that others can’t. I tip my hat to you, Eric Durtschi. You have established not one, not two, not three, not four, but five barriers that no one else has been able to cross. That is why it was hard and that is why your business most certainly will succeed.
Let me list a few of the barriers that Eric was able to implement.
Barrier Number One: Eric is an expert on the quality of cocoa beans. Very few other individuals have this capacity. He knows all about the many different kinds of cocoa beans, how to bring out the best taste, how to season them, right down to the make-up of each species of cocoa bean.
Barrier Number Two: Eric has developed much of his own equipment in order to grind these beans in a special manner.
Barrier Number Three: Eric is a first mover in this field, the first to market this type of product and he already has a large following. He’s not selling high-end cocoa beans or even chocolate. He’s selling ground-up cocoa to be used as a drink similar to coffee. These beans contain health benefits and offer sustainable energy that many other drinks don’t have. He is a first mover with new, disruptive technology.
Barrier Number Four: He spent his time establishing specialty retailer channels one at a time himself. How many people are crazy enough to do that? That’s a barrier to entry that you can’t put a price on.
Barrier Number Five: Eric has access to a supply source of some very special and unique beans. These are high-quality beans that most people just can’t get themselves. What a corner on the market!
And there you have Eric’s five incredible Barriers to Entry. In most business if you have one, two, or three you have a killer viable business. Eric, I’m a little bit jealous of your business. It is so exciting because of these Barriers to Entry give you such an advantage.
All of you who are reading this, let me say I hope that it is hard. I hope that it is challenging in those early phases and I hope that indeed you put smart Barriers to Entry around your company so idiots can’t come along and copy your business. The more barriers you put in place the more viable your business can be. You can do things hard-easy or easy-hard. I personally would rather have it hard now, making it easy later rather than the other way around. Never forget the importance of Barriers to Entry in your business. Again, I congratulate you Eric and expect incredible things from you.