Product Differentiation with a Sustainable, Defensible Barrier

You tell me you have a new widget.  There are similar widgets out on the market already, but you say yours is better.  It has more bells and whistles, or it has different bells and whistles.  No one else is offering this product/service today.  Should I invest?  Well, you have to do lots more convincing first.  Do you have any defensible IP?  How broad is your defensible position, or could a competitor design around it and not infringe?  You say you don't have any real IP, but you're first to market, and you can run faster than the competition?  The rule-of-thumb is a competitor can design it twice as fast as you took, so if it took you two years, your competitor will be able to offer it in a year or less.  I'm not saying these cases are non-starters, but be sure to look very critically at how your product is differentiated, and try to quantify why it's better.  Better performance?  By how much...10%?  10x?  Create a competitive matrix with features on one axis and all of your competitors (and you) on the other axis.  Then, fill in the "bingo card" to see if you're really head-and-shoulders above the competition.  Especially in cases where there is a questionable defensible barrier, it is absolutely critical that the founders have vast domain knowledge and a Rolodex filled with contacts that will enable them to build critical relationships in their target industry.