I used to like the moat idea of Buffett, but now I think it's more for mature businesses. Things like IP, brand, switching costs, channels, partners etc. As a w

I used to like the moat idea of Buffett, but now I think it's more for mature businesses. Things like IP, brand, switching costs, channels, partners etc. As a war metaphor, it's a nasty, zero-sum game. Defence is only part of the "business" - it's logically dependent on having something to defend. A moat around nothing is pointless. There's a more insidious aspect: while thinking defensively, worried about how you could be attacked, you aren't out there enabling customers to solve their problems. It's not a fun way to be. But what is worse, is that the most effective way to build a moat (for a startup) is focus 100% on enabling customers to solve their problems: every person you help improves your brand [a moat]. Every product improvement (that better solves the customer problem) makes your product harder to copy [a moat]. If you learn about your customers, the details of what they need, how to solve it best given their situation, and how you could let them know about your solution, and what language they would most easily understand, then you are serving them, but because this takes time and effort to work out, it's also hard to copy [a moat]. If you serve them best If you look at the most successful companies, even mature ones, they are constantly trying to improve their product and improve their brand - in particular, technology companies like apple, microsoft, google; but it even includes mature consumer companies like colgate-palmolive, J&J, coca-cola, nike [new toothpaste; new coke flavours, bottle-sizes, advertising campaigns; new shoe "technology", design and advertising]. Be a knight, not a dragon. By working out how to serve customers, you not only make money, but incidentally create a moat. But if you focus on making a moat, serving customers will be secondary to you, you'll make less money, and you'll make a less effective moat - with less for it to defend. This path leads to less success, deservedly so. The only "sneaky" aspect I'd include is to be aware of your core business value (the expertise/knowledge above), and keep it to yourself. http://news.ycombinator.com/item?id=3267432 http://news.ycombinator.com/item?id=3267432 The business part is getting your solution to customers who need it, who then buy it: First, they need to know your solution exists, through promotion, perhaps word of mouth. It helps to have a short, pithy, catchy way to explain the product, that can be quickly understood, be interesting, memorable: easy for one person to pass on to another, and a motive to do that. It's important to focus on the problem that people that it solves (rather than the solution), so a person can think "hey, that's just what Ed's been looking for. I'll pass it on". They need to be able to assess it easily; try it out easily (to confirm it solves their problem); and buy it easily. In other words: build something [app] people want [problem] - and get it to them [business]. TL;DR if we divide a startup into tech/biz, the biz part isn't building a moat. It's actually helping people.