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Well, the one thing the moat map clarified for me is the 'killer app' framework isn't always applicable. If your company has differentiated suppliers and the ne
by iamwil 8y ago
Well, the one thing the moat map clarified for me is the 'killer app' framework isn't always applicable. If your company has differentiated suppliers and the network effect is externalized, then looking for the killer app makes sense.
If however, you're on the other end of the spectrum, and your network effect is internalized and suppliers undifferentiated, it doesn't make sense to ask what the killer app is.
Where the moat map fails for me is when I try to slot Homejoy in there. Like Uber, they have an externalized network effect. They assumed, at first, that their suppliers were fungible commodities; but found out that they weren't. People tend to want cleaners into their house that they trust. So by that notion, according to the moat map, they should have had a moat. But Homejoy ended up not doing well, for various reasons. So I'm guessing the moat map isn't the whole picture.
- ghiculescu 8y agoWasn't Homejoy's problem the fact that once people found someone they trusted, they would just transact with them outside of Homejoy and, thus, not pay Homejoy the repeated commission they expected? By contrast, you can't get the benefit of Microsoft's Windows ecosystem, or Apple's app ecosystem, without first giving Microsoft/Apple the full amount of revenue they expect from you. In other words, a differentiated supplier / externalised network moat is only a moat if the vendor can get all its revenue upfront, or can reasonably ensure that the moat will keep customers locked in for a long time.