Moats & Competitive Advantage

NZS Capital: Traditional moats can enable exploitative value capture

Ben Gilbert & David Rosenthal

“Traditional competitive moats should be viewed skeptically when they enable companies to extract excessive value from customers, employees, or partners. A non-zero-sum framework suggests avoiding companies that use competitive advantages primarily to raise prices or exploit locked-in customers, as evidenced by situations where major platform holders face regulatory challenges and lawsuits from key partners due to aggressive value capture.”

Grieve: Hidden moats and competitive disguise

Kyle Grieve

“Companies often possess multiple moats that aren't immediately visible, and some may even be deliberately hidden. A particularly strong signal of competitive advantage is when companies complain to regulators about lacking one. Amazon exemplifies 'aggressive mimicry' - appearing non-threatening as an unprofitable startup while building formidable advantages in brand, network effects, and scale economies that competitors underestimated.”

Finck: Customer dependency as a competitive moat

Clay Finck

“Customer dependency on products or services creates a strong competitive moat, particularly when the product is mission- critical yet represents a minimal cost relative to the customer's budget. Vertical market software exemplifies this dynamic: specialized software for niche businesses (like bowling alleys) becomes indispensable while consuming only 1-2% of revenues, making switching costs high and price sensitivity low.”

Ben Gilbert & David Rosenthal: Scale economies and network effects as competitive advantages

Ben Gilbert & David Rosenthal

“Companies with significant scale economies (like TSMC) or network effects create competitive advantages where one or two players capture 80-95% of profits in a market. These scale-based and network-based advantages create compounding flywheels where increased scale enables more reinvestment, deeper customer impact, and further entrenchment, particularly in digital markets like advertising and smartphones.”

Complexity Investing & Semiconductors with NZS Capital (Extended Cut)

Ben Gilbert & David Rosenthal

“…t how you guys think is you you're actually not looking for moats, right, in these companies? Cuz like a lot, you know, the companies you just described, and I think a lot of investors would think about like, "Oh, well, well, like they've got like really deep”

Michael Mauboussin Master Class — Moats, Skill, Luck, Decision Making and a Whole Lot More

Ben Gilbert & David Rosenthal

“…rter himself never really defined it and so we argue that a competitive advantage should have two features one is an absolute one one is a relative one the absolute one is you should have returns today or returns that are promised to be above your cost of capi”

Quality Shareholders by Lawrence Cunningham w/ Clay Finck (TIP679)

Clay Finck

“shareholders can help serve as a competitive Advantage for the company because it helps managers keep an long-term Outlook so another example is marel who's led by CEO Tom Gainer he's been featured on the podcast with William Green in addition to Tom Russo so”

Investing in Hidden Monopolies: Why Customer Loyalty Creates Superior Moats w/ Kyle Grieve (TIP744)

Kyle Grieve

“…siness can protect itself against competitors, consider the competitive advantage period, a time which a business enjoys an advantage over its competitors. Capitalism will show that this period is relatively short for the majority of companies. Things like tec”

Investing in Hidden Monopolies: Why Customer Loyalty Creates Superior Moats w/ Kyle Grieve (TIP744)

Kyle Grieve

“…though their consequences are enormous. When our long-term competitive position improves as a result of these almost unnoticeable actions, we describe the phenomenon as widening the moat. Our managers focus on moat widening, and they are brilliant at it. Now,”

Wise PLC: Competitive Moat & Valuation Framework w/ Kyle Grieve & Daniel Mahncke (TIP806)

Kyle Grieve

“…eally, really strong tailwind post-COVID. The second one is competitive forces. So, especially other fintechs, you know, we've already mentioned Airwallex. They've already seen a large benefit from having a large number of banking partners, and which allows th”

The McDonald's Story: How Ray Kroc's Vision Became a Global Giant w/ Kyle Grieve (TIP753)

Kyle Grieve

“…lly don't really think McDonald's had some sort of inherent competitive advantage that isn't available to basically any other well-skilled competitor. Where they differentiate themselves though is in execution. So Croc points out that many former franchises an”

Wise PLC: Competitive Moat & Valuation Framework w/ Kyle Grieve & Daniel Mahncke (TIP806)

Kyle Grieve

“…bit more about this business and I think it's really unique competitive advantages and that how it just, you know, making a product that really improves the ability to move money across borders, you know, as cheaply and as fast as possible, especially if you t”