Definition
A structural advantage that protects a business from competitors copying its success, such as network effects, data, brand, or switching costs.
Why it matters for growth
Growth without a moat is temporary; competitors can copy tactics, but they cannot easily copy structural advantages like an entrenched network or proprietary data.
Example
A marketplace's moat is its liquidity: a new entrant can copy the interface but cannot instantly replicate years of accumulated buyers and sellers.
FAQ
- What is Moat?
- A structural advantage that protects a business from competitors copying its success, such as network effects, data, brand, or switching costs.
- Why does Moat matter for growth?
- Growth without a moat is temporary; competitors can copy tactics, but they cannot easily copy structural advantages like an entrenched network or proprietary data.
- What is an example of Moat?
- A marketplace's moat is its liquidity: a new entrant can copy the interface but cannot instantly replicate years of accumulated buyers and sellers.