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  #23  
Old June 25, 2015, 11:11 PM
Dien Rice Dien Rice is online now
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Join Date: Aug 2006
Posts: 3,357
Default Toll positions and moats... thanks Ankesh!

Quote:
Originally Posted by Ankesh View Post
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.
Hi Ankesh,

Thanks for this... I'll have to ponder this...

I do think there is a relationship between "toll positions" and what economists call "barriers to entry"...

Quote:
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.
I agree with your point here...

That was partly my point in an earlier post, see the P.S. here...

http://www.sowpub.com/forum/showthread.php?p=35260

How easy it is to set up such a multi-year contract, I don't know... Without a contract, I don't see what's stopping someone from coming in and giving the restaurant or hotel a "better deal"...

Of course, the likelihood of that happening may be small. It might also depend where you are - the likelihood is probably smaller in a small town than in a big city...

Best wishes,

Dien
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