Moat
01 Definition
Moat meaning: A durable advantage that protects a business from competitors over time.
A moat, popularized by investor Warren Buffett, is a lasting competitive advantage that makes a business hard to displace. Common sources include network effects, switching costs, brand, patents, and cost advantages. Moats can erode as technology and markets change, so they require ongoing investment to defend.
Also called
Why it matters
How Moat fits the work
A moat matters because it helps a business keep customers and profits even as rivals attack, supporting a more stable long term position.
In context
The marketplace built a moat through network effects, since more buyers attracted more sellers, making it hard for a new rival to match its selection.
Practical note
Not every advantage is a moat. A temporary edge that rivals can copy is not durable, and even strong moats can weaken if a business stops reinvesting in them.