The term “monopoly” here is hyperbole. Monopolies have not been allowed in the US since the signing of the Sherman Antitrust Act in 1890.
But you do want to defend and grow your business by having an “economic moat”. An economic moat is a competitive advantage that differentiates you from your competition.
Common examples of economic moats are patents, cutting edge technologies, or distribution platforms that your competition doesn’t have access to.
I want you to have a moat, or monopoly control, because it allows for firmer pricing. The better your pricing, the better your margin. The more margin you have, the most you can invest in sales and marketing. It triggers a virtuous circle for growth.
And the best way to do that – for those of us who aren’t smart enough to develop patented tools – is to get away from commoditization and generalization and create differentiation. You can do that by:
- Building a better mousetrap (but, honestly, most of us can’t do that so we have to consider other options), such as,
- Improving marketing (solid marketing will convince people to pay $60 for a Lululemon t-shirt when a less expensive option will do),or, my favorite,
- Develop a niche. Doctors are the best examples of that. My general practitioner physician is great, and gets paid well. But she gets paid only a fraction of what the orthopedist got paid for putting in my prosthetic hip.