What are "toll positions"? (A refresher post!)

Originally Posted by Ankesh

Thanks Gordon and Michael for this awesome conversation.

In my mind, I have 2 definitions.

1. Toll position. A place that you create for yourself in the middle of a lucrative field so that everyone who wants to be a part of the field has to pay you a cut. Dan Kennedy does that with his info products (from what I know, Dave Dee sold more Dan Kennedy products than Dan Kennedy himself - at least that was true a few years back) and consulting (he gets royalty / commission on good performance).

2. The moat. As Warren Buffet says. Create a moat around your product or company so that others can't compete with you.

Dan Kennedy lacks a moat because anyone else can become a marketing guru too. But Sean Ellis has created a moat by coining a new term "growth hacking." He is the first person people will think of as a guru when it comes to growth hacking. Jay Conrad Levinson had done this too with the term Guerilla marketing.

There are various ways to create moats. Patents and trademarks and using legal options (for eg: many restaurants can only either sell Coke or Pepsi products - not both. This is enforced by an exclusivity contract). Keeping price really low so others can't compete (Walmart). Out innovating others. Being the first one to create a platform (Stock exchanges, airbnb.com etc).

I think a lot of Don Alm type ideas are toll positions because no restaurant or hotel will spare adspace for 2 guys. But they may not necessarily be deep moats unless you employ legal contracts to keep things exclusive.

Hmm - lots to think about.

Hey Ankesh!

Good point about the moat.

In one instance Dan does have a "moat" IF they person is so convinced that only Dan Kennedy can help them, then there is a "moat" present.

And really that's the magic of the Dan Kennedy system.

In his program "Never Be Out of Work", he gave the time frames involved from the first time a client entered his funnel (think either one of his books or the "No BS Newsletter") to the time they scheduled the $19,000 per day consultancy and the length of time is very large. We're talking many months on average. And over that time the client becomes more and more convinced that DK IS the answer to their marketing problems so you have both a "toll position" and a "moat".

The other "moat" that DK has is that he's an offline guru... anymore those folks are few in number and growing smaller.