If you're a first-time founder building in a regulated or relationship-heavy space, this is your advantage. You're controlling access to markets the giants can't enter without you. I'm not saying your technology is not important, it is, but it's a piece you need out of many to make a competitive advantage. Technology standalone will not save you.
In the 90's, 5 billion Iridium Satellite Communication landed you a defense contract. Today you use it on iPhone 14 for SOS emergency.
Your technology alone is not a competitive advantage, but maybe that's part of what makes competition harder.
And why everything is harder? From now on when everyone can builds everything, R&D will be lightning fast.
It's going to be even harder to raise funds.
Read on to find out what new strategy increases your chance of landing a fund.
I'll save you the trouble. The next two paragraphs are the crux of this piece.
Read beyond if you want to take action.
Rocket Lab spent years on R&D. Then they bought Geost for one reason: Geost already had the security clearances and the customer relationships that would take Rocket Lab five years to build from scratch.
This is the pattern: Giants have the technology and the money and they are after access to specific customers, regulatory approvals, or established trust in protected markets. Building that access costs more and takes longer than the R&D itself. Usual suspect: The vertical integration.
Or
Strategic partnership with YOU.
PART 1: FOR FOUNDERS
Three Types of Gatekeepers
You control access if you have one of these:
1. Regulatory Access You hold licenses, certifications, or clearances that take years to obtain.
Example: Geost had US defense clearances. Rocket Lab bought them to win an $816M contract with the Space Development Agency.
2. Customer Relationships Your customers are locked in through compliance requirements or long-term contracts. Switching costs are high. The relationship itself is the moat.
Example: Inmarsat had contracts with 6,000 aircraft and ships. Viasat bought them to guarantee demand for their satellite capacity.
3. Platform Control You built the interface where decisions happen. Developers, analysts, or operators use your tools to work with data from upstream providers. You sit between the raw input and the final decision.
Example: Sinergise built the platform that 12,000 analysts use for satellite imagery. Planet bought them to own the developer ecosystem.
If you have two of these, you have a competitive advantage.
What to Change
There is a better pitch structure than the classical layout:
Market Opportunity
Competitive Positioning
Customer Acquisition
It only works if you're first and fast enough to own the category. And you have the best people.
Let me show you with examples, what can you show investors that increase your chances
Market opportunity
used to be about market size:
"The satellite data market will reach $10B by 2030."
What stops others from taking it from you?
Today you have to show investors something stronger:
"EU regulations require European suppliers for government satellite programs. We're one of three certified providers. US companies can't bid without us."
Competitive position
It makes founders talk benefits:
"Our solution is 30% faster."
Great. Until someone comes along with 40% faster next quarter.
You can make a stronger argument if you can complement it with regulations:
"We went through FAA compliance workflows. Competitors need 18 months and $2M to get the same approval."
Now your tech AND your compliance are your moat.
Customer acquisition
"We plan to sell to agriculture and government." With CAC and … .
Good. Essential even. But who else wants those clients? Probably a giant.
Better:
"We're integrated into tools that 12,000 agricultural analysts use daily. Our API is the default. Competitors have to convince users to switch platforms, not just try new data."
MidJourney did this. Many companies have these advantages but still pitch technology alone.
Every claim should answer: What do we control that upstream companies need but can't build themselves?
Action Plan
Before your next investor meeting, make a table like this:
Upstream Company | Recent Acquisition | What They Bought | What They Still Lack |
|---|---|---|---|
Rocket Lab | Geost | US defense access | European sovereign markets |
Viasat | Inmarsat | Maritime/aviation customers | Developer platforms |
Planet | Sinergise | Analyst community | Real-time decision tools |
Fill in your industry. Identify upstream companies. Look at what they've acquired in the last three years. Find the gaps.
That gap is you influencing the investors.
PART 2: FOR INVESTORS
Why Access Beats Technology
Pfizer bought Warner-Lambert for $90B to control Lipitor's sales force, not the drug formula.
Amazon bought Goodreads for $150M to access 38M book readers, not to acquire recommendation algorithms.
Viasat bought Inmarsat for $7.3B to inherit customer contracts, not satellite technology.
There is a clear pattern of companies pay premiums to skip years of relationship-building and regulatory approval.
In technical industries, this premium is predictable. The harder it is to replicate access, the higher the multiple. This is the competitive advantage.
Two Cases from Space
Case 1: Rocket Lab and Geost Geost made sensors for US missile defense. The technology mattered, but the real value was their existing contracts and security clearances with the Space Development Agency.
Rocket Lab bought Geost and immediately won an $816M contract. The acquisition likely cost tens of millions. The contract access was worth 10-15x that.
Case 2: Planet and Sinergise built Sentinel Hub, a platform that simplified satellite imagery analysis. They had 12,000 active users and were embedded in the EU's Copernicus program.
Planet bought them for an estimated $30-50M. Post-acquisition, Planet secured institutional contracts with the European Commission worth over $100M.
The platform that sits between raw data and the end user controls the pricing and the relationship. Sinergise was the interface layer. That's the most valuable part of the stack.
Due Diligence Questions
Ask these:
Are you named in regulatory filings as an approved vendor?
Can your customers leave without violating compliance requirements?
How many contracts do you have with auto-renewal clauses tied to regulation, not preference?
Which upstream companies have publicly stated they need access to your customer segment?
Show me the table of upstream gaps you've researched.
If the founder hasn't mapped the upstream market, pass. If they're pitching technology without explaining the access moat, they haven't understood their own position.
Next Steps
Founders: Complete the research table. Rewrite your pitch to focus on access, not features. If you want feedback, send me the table.
Investors: Review your portfolio. Identify which companies are actually gatekeepers. Use the diligence questions on your next three deals.
References
1. Aviation Outlook Report Aviation Outlook. (2024, August 25). Rocket Lab: Company analysis & outlook report. https://www.aviationoutlook.com/p/rocket-lab-company-analysis-outlook-report
2. Strategic Market Research Report Strategic Market Research. (n.d.). Voyage data recorder market. https://www.strategicmarketresearch.com/market-report/voyage-data-recorder-market
3. Viasat News Release Viasat. (2023, May 31). Viasat completes acquisition of Inmarsat. https://www.viasat.com/news/latest-news/corporate/2023/viasat-completes-acquisition-of-inmarsat/
