What will be your defense against commoditization?

I saw a gadget on a webpage from Google Gadgets and it was cool. Exploring further, it seems like Google has tons of them in their gadget directory. Clearly at this point in time, Google seems to be interested in the gadget space. There are other players in the marketplace whose primary business model surrounds gadgets ( Examples: WidgetBox  Majikwidget ) and I am sure they are looking at this move seriously.

Generally speaking, While startups are great at innovating, they may not have the defense strategy outlined when established players launch an attack at their core strategy. When I searched for gadgets on Google, the first sponsored ad that came up was for Google Gadgets. This ad comes at a VERY low cost for Google but it costs a fortune for a startup to match that.

I am not offering a solution here but here are a few reminders:

1. Your core strategy may be vulnerable to attacks and having a “Plan B” will always help.
2. Innovation is important but a strategy to capitalize on your innovation is also equally important.
3. And, of course, don’t forget those patents. They do matter (sometimes)!