Moat
A sustainable competitive advantage that protects a business from competitors, like a moat protects a castle. Types include network effects, switching costs, economies of scale, brand, and regulatory capture.
Used in the Books
This term appears in 24 chapters:
"His executives were less polite. The objections came fast. Netflix's business model depended on the postal service - what kind of moat was that? The company lost money on every customer at current scale. Mail-order was inconvenient; people wanted movies NOW, not in two days."
"...ither could exist alone in their current form. Most business strategies assume independence: build your product, acquire your customers, defend your moat. But biology shows a different path. The most successful organisms aren't the most self-sufficient. They're the best symbionts - the species that for..."
"...ble," use K-selection: - Fewer bets, higher investment per bet: Build premium products with long development cycles. - Longer timelines, deeper moats: Invest in brand, infrastructure, customer lock-in. - Slower iteration, higher quality: Test thoroughly before launch, protect reputation. If ..."
"Enterprises. The mistake organizations make: applying climax-stage strategies (deep investment, slow iteration, protective moats) to pioneer-stage markets, or applying pioneer-stage strategies (fast iteration, high burn, customer acquisition at any cost) to climax-stage markets..."
"...ath: 40 blockbusters = entire budget, angry subscribers demanding more variety. 100 mid-tier titles = same budget, satisfied subscribers, competitive moat. He chooses... medium mussels. In 2007, Netflix had a choice: which content to license for streaming? The options: - Blockbusters (new rel..."
And 19 more chapters...
Biological Context
Moats parallel ecological defenses: thorns, toxins, camouflage, and territorial behavior. Just as organisms invest in protection proportional to the threat, businesses invest in moats proportional to competitive intensity. The strongest moats, like the best defenses, are costly to overcome.
Business Application
Warren Buffett popularized 'economic moat' as an investment criterion. Moats determine long-term profitability—businesses without moats see profits competed away. The key question: what prevents competitors from copying success?