A moat matters only if it persists and converts into superior economics.
| Concept | Explanation | |---|---| | Switching costs | Customers face cost, risk, or disruption when changing providers. | | Network effects | The product or network becomes more useful as participation grows. | | Cost advantage | The company produces or distributes at structurally lower cost. | | Brand and trust | Reputation supports demand, pricing, or retention. | | Intellectual property | Patents, data, expertise, or technology restrict competition. | | Scale advantage | Size improves purchasing, distribution, data, or fixed-cost economics. |
A moat is valuable only if it persists and converts into superior economics. Popularity without pricing power or retention may not create durable value.