Every entrepreneur’s dream is a company protected by a “moat.” For those regular listeners to our radio show, “moat” is a term used often by Mariusz Skonieczny, stock picker extraordinaire and frequent show guest. Mariusz loves moats because he knows that a “moated” company has a tremendous advantage over competition --- that being the fact that a “moated” company has found a way to foreclose competition.

In essence, then, a moat is something that enables a business to “own” its niche, free from competition.

Example: When Apple “went its own way” by creating a propriety operating system for all of its computers, Mr. Jobs pretty much made it impossible for anyone to compete directly with Apple without first licensing the Apple operating system. (Which, we should point out, is simply not available for license.) Thus, Apple maintains its “proprietary space” right along with the margins that go hand in hand with that space.

Perhaps a better example of this is Sony Corporation. Sony took a huge risk and developed an ultra-high definition video format called “Blu-Ray.” Blu-Ray, and at one time, competed with a similar product from Toshiba. But the public voted with its pocket book, and Sony won. Now, Sony has no competition. In essence, a moat.

Very early in the first semester of the very first course taught in our Entrepreneurial Program at Duquesne University, our students talk about moat-building. Except that, in instead of “moats,” we talk about niches. Remember, “A niche is a moat and a moat is a niche.” Consequently, we tell our students to, “Do whatever you must to differentiate your product or service. Then, never stop working on protecting that differentiator. Always try to ‘stay different’.”

A lot of people recoil from this challenge. They find the task of moat building so overwhelming they instead just throw their hands up in the air, flat-out competing with whomever else happens to be in their market space.

This doesn’t have to be. I personally believe that every product and every service can be differentiated and protected.

Sometimes this protection comes at an extreme cost. When this happens, the entrepreneur is advised to consider abandoning that particular approach in favor of another.

And, when all approaches are exhausted without success, entrepreneurs are advised to look for a completely new and different product or service.

But as we said above, every product, every service, can be protected. Sometimes you just really have to think. And sometimes the building of a moat can drive you to the absolute edge of fiscal practicality. But you must persist. Your niche can and must be protected. This is paramount. I personally think that a business without a protected niche is a business that one should really consider abandoning altogether. It’s that close.

Entrepreneurs are fond of the saying, “Think Big.” Think Big is an admonition that exhorts entrepreneurs to “swing for the fences.” The thinking here is that, “thinking big,” will lead the entrepreneur to ultimate market dominance. It’s pure “niche think.”

But while “thinking big” is thinking right, beware of equating a “Think Big” philosophy with “Think Big” tactics. You can very easily “think little” tactically, while en route to your “Think Big” objective.

Because moats are frequently built by extracting tiny handfuls of dirt, just one handful at a time. Sometimes moats are the end result of millions and millions of tiny shovels constantly digging away --- just as you might see a four-year-old digging away sand on a beach.

Now take the image that’s presently in the forefront of your mind. You know, the four-year-old with the three-inch plastic shovel.

So, how does this image make you feel?

If you’re like me, you’re feeling exhausted. You’re feeling this way because you know just how tedious and painstaking it is to dig a man-sized hole one handful at a time. We’ve all done this (usually because our four-year-old daughter wanted us to) and so we all know what’s involved.

I’m guessing the thought that’s going through your mind right now is, “Who the hell would want to even do this?”

And that very question, my friend, is also the answer. Because great businesses are built and protected by entrepreneurs who were willing to get down and dirty. Guys who didn’t mind doing the painstaking and arduous work that the other guy saw either as dirty, or unglamorous.

Stop for a minute and think. Why is it that “glamour businesses” (businesses like television, advertising, sports, racing, high-fashion, and the like) are so sought-after by potential business owners and employees?

Everyone wants to work in advertising. Right? Same thing with television. And sports. You work in these industries, you put yourself in a position to not only meet, but also even know the “beautiful people.” There is always the slight possibility that, and some day, a “beautiful person” will fail to show up for work and you, dear friend, find yourself ordered into his/her slot. You do a great job, and two weeks later you’re on the front page of People Magazine.

Glamour employers know this. And so they also know that they can leverage this by making starting salaries so embarrassing low that they are not even published. Glamour employers know that they can get people to work for these ridiculous salaries because people think just as we described above. My grandfather used to say to me, “Son, the trick to life is to know something that no one else knows and then make them pay you for that knowledge.” My grandfather was also fond of saying, “You can make an awful lot of money doing dirty, backwater grunt-work … the kind of work that 99 percent of the people wouldn’t be caught dead doing.”

Side story: I was once in England with a guy who had a six-grade education. He was also one of the richest people I’ve ever met in my life. One Sunday morning, he took me to his rendering plant. Now, when one “renders” an animal, one basically strips away each and every part of that animal and sells it to someone who has a use for it. (Example: Oftentimes, certain perfumes and soaps are made from certain parts of animals that I’d just as soon not talk about. You’d also be amazed by what you can do with a cow’s brain once it is harvested.)

I could smell this guy’s plant a quarter of a mile away. By the time we got to his private parking space out front (I could never fathom why anyone would want to steal that parking place), tears were streaming down my face.

But he was driving a brand new Royals Royce Silver Cloud, and it was paid for, not leased.

So I’m guessing that you get the point.

I have a friend whose name is Nick Pinkston. Nick’s been on my radio show many times and he’s one of the brightest individuals I’ve ever known. He is a veritable storehouse of information, especially technical information.

Nick is in 3-D printing. But Nick is smart and so, from Day One, he never planned on “flying with the masses” ... the masses being those people whom either build or purchase sophisticated, expensive machines that, and when given the dimensions of a physical object, actually print that object (right before your eyes, in fact --- it’s pretty amazing to watch a 3-dimensinal object “materialize” right in front of you, but that’s what happens) using just about any material you specify (so long as it is physically feasible).

3-D printing will, and in my opinion, change the world. It is a game-changing technology. Everyone must respect, and even to some degree, fear, the 3-D printer.

But, and as I said, Nick has no interest whatsoever in being just another print house. There are already tens of thousands of these companies in existence --- companies that can reproduce, and even customize with your monogram, your favorite pair of cufflinks.

No, Nick doesn’t want to make $8.00 dollars net profit on a $50 dollar set of cufflinks. He could, but he doesn’t want to.

Instead, Nick has painstakingly: a.) identified the name, rank, and serial number (you get my point) of each and every dude and “dude-ette” currently in the business of providing 3-D printing services; b.) learned precisely how these people do business; c.) documented the intricacies of their file structures, so that individuals wishing to, and in effect, “buy time” on their machines can have their product specifications automatically translated; and d.) collected a whole bunch of other information (which I dare not get into in detail about) related to such things like “machine types being used,” “unique printing capabilities and limitations,” and “file types they specialize in” … and this is just for starters.

In short, Nick’s company already knows or soon will know everything it needs to know about every 3-D printer in America and perhaps the world. He right now knows or will soon know the intricacies and capacities of those printers, their rental rates, and how they can best be utilized.

So, how did he get this information?

For those of you old enough to remember John Houseman (think “Paper Chase”), he did it the old-fashioned way. He earned it.

And earn it he did. For Nick’s company, and over a significant period of time, has actually “dug up” all of this information. Then, they validated it and converted it to a data base that is worth many, many times more dollars than the total amount of dollars already-investment in the company.

This was not easy. This was dirty, back-water, tedious, painstaking, and down-right ugly work.

But somebody had to do it. And guess what? This work is now a major part of Nick’s Company’s moat. This work is, “something nobody else knows.” And so guess what else must follow?

That’s right … Nick is going to make the world pay him for that knowledge.

Who would ever think of a mailing list as a moat? Obviously, Nick Pinkston and the rest of his team did. And now he has a “multi-year” head-start on competition. Nick and his teammates did nothing that anyone else in the world could have done. But he did it first.

Now in fairness, we must point out the fact that Nick and his teammates also took that data and used it (at least in part) to create software that customers can employ to generate dollar-estimate quotations on any 3-D printing project they can conceive. (BTW, and before I forget, the name of Nick’s company is CloudFab). So, and while data is unto itself somewhat of a moat, the real barriers to entry here are these software programs. The software programs that Nick and his partners use to instantly generate quotes. While I was originally skeptical that all of this could even be done, I now stand in awe of what Cloudfab, the company, has created. For, in essence, Cloudfab is a one-stop shop for anyone wishing to create any mass-customized object.

In case you haven’t noticed, mass-customization is here to stay. The days of “economies of scale,” and while still with us, have never been less important. The days of short-run production and mass-customization have arrived with a resounding bang.

So, build your moat young man/woman, build your moat. But don’t think of your moat as some massive, expensive, physical and perhaps cost-prohibitive production. Nay, think instead of your moat as anything that will help you foreclose competition, regardless of time/energy investment, size of moat, or moat make-up.

For as you can see, your moat can even be a mailing list.