Competitive Moat
A structural advantage that protects margin and market share over time, hard to copy.
What it is
A moat = a defensible advantage that compounds. Network effects, switching costs, brand, scale, IP, data, learning curve. Hard to copy, harder to dislodge.
Why it matters
Without a moat, every dollar of profit invites a competitor. With one, profit compounds. Buffett built his fortune on moat thinking.
Common moats
1. Network effects (Uber). 2. Switching costs (Salesforce). 3. Brand (Apple). 4. Scale economics (Amazon). 5. Proprietary data (LinkedIn). 6. Regulatory (Pharma).
Founder-led brands
Sometimes the founder IS the moat. Hard to copy a person's judgment + reputation + network. Comes with risk, founder leaves = moat collapses.
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