A company's hard-to-copy advantage for a given feature often comes not from the customer-facing content or feature itself, but from the proprietary tools built to produce it and the exclusive relationships formed with the partners who supply it. Gibson Biddle makes this point about Netflix's interactive content (Interactive Content as Netflix's Next Growth Stage): the moat is the authoring tools and the exclusive deals with storytellers and studios, not the interactive episodes a viewer sees.
Apply: when assessing whether a product bet is "hard to copy" (Four Sources of Hard-to-Copy Advantage (Brand, Network Effects, Technology, Scale), DHM Framework (Delight, Hard-to-Copy, Margin-Enhancing)), evaluate the tooling and partner relationships required to produce it, not just the visible feature a competitor could copy.
Netflix built a streaming hardware box nearly to completion, then killed it a month before launch. Owning a competing streaming device would have permanently blocked the console partnerships (Wii, PlayStation, Xbox) Netflix needed for distribution, and Wall Street was already penalizing the idea of Netflix becoming a lower-margin hardware company. Abandoning a nearly-finished internal investment was the correct call because the exclusive-relationship moat (getting onto every living-room console) mattered more than owning the box.
The roughly 100 engineers laid off in that decision didn't just disperse — they became the founding team of Roku, meaning Netflix's own strategic reversal directly seeded a company that now competes with it in streaming hardware.
Из тем: Netflix, Consumer Science, and Strategy Storytelling