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A strong business needs more than a good product

An economic moat is a durable advantage that helps a company defend its value against competitors.

The idea

Moats can come from trusted brands, network effects, switching costs, scale, unique data, regulation, or cost advantages. Products can be copied more easily than systems.

An example

A payment platform becomes harder to replace as more buyers and sellers depend on the same network.

Put it into practice

When evaluating a business, ask not only why customers choose it today, but what could keep them choosing it tomorrow.