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The most commonly sought moat in consumer technology is the “network effect”, which is when the value of a product increases directly as a function of how many others use that product. However, there are real world problems to be solved and businesses to solve them which, no matter how hard one spins the story, will not be candidates for a network effect approach. The nature of these problems or products simply doesn’t allow for the value proposition to be directly tied to the number of others using the product. Here post summarizes a list of non-network effect sustainable competitive advantages that are relevant today: - Scale - Brand - Non-network switching cost

  • JQ

    Jason Quey

    about 1 year ago #

    I think startups should start thinking about moats like stock investors do. The most common economic moats are cost/pricing advantages, switching costs, efficient scale, intangible assets, and network effects.

    Very similar, but I think different emphases.

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