Startup Moat

“So, what’s your moat?”

If you're building a startup, you'll hear this question often, usually from investors. Other common versions include:

• “Why can’t [Google/Microsoft/Big incumbent] build this?”
• “How difficult is it for others to copy you?”

The intention behind the question is understandable. Startups are inherently risky; there are many ways to fail, and getting outcompeted is certainly one of them.

Peter Thiel famously wrote in the book Zero to One, “Competition is for losers,” and outlined four enduring advantages that can serve as moats: proprietary technology, network effects, economies of scale, and strong brand.

Proprietary tech means building something 10x better than existing solutions. Network effects increase product value as more users join. Economies of scale allow for lower costs as you grow. Brand builds trust and recognition that compound over time.

These are real moats, but you don’t start with them.

In the Beginning, You Have No Real Moat

When you're just starting out, your company is like a baby surrounded by wolves. You're likely not the first to tackle your chosen problem or enter your target market. You have no scale advantages yet, no brand recognition. And the moment you launch, assume your product will be copied.

"What about proprietary tech?"

As a software engineer, I hate to admit it, but tech alone isn’t a real moat. There's no shortage of skilled developers, and anything you build can be replicated by others. Modern AI tools have only accelerated this. While deep tech can be defensible, even the most advanced technologies can eventually be reverse-engineered.

“I have a personal brand!”

Personal brand is great, but it's not a defensible moat, especially early on. It might open a few doors or attract early attention, but unless your product delivers real value, the impact fades fast. And brand is fragile: one misstep can erode hard-earned trust overnight.

“We are building something no one else is doing yet!”

If you somehow find yourself in the rare position of having no competitors at all, that might be a red flag. A market with no competition often means there’s no market at all. It’s worth pausing to validate that the problem is real, painful, and urgent enough that people are actively seeking solutions.

Recently, I came across a clip of WhatsApp’s founder talking about competition. It captured perfectly what the market throws at you when you’re building. His approach, which I deeply agree with, is to ignore the noise. Focus on your product, your users, and your team. That’s where your real moat begins.

The Only Moat You Can Rely On

There is, however, one genuine moat available to early-stage startups:

Speed

The real edge you have in the early days is your ability to execute faster than anyone else. You can ship faster. You can learn faster. You can change directions without navigating layers of approvals. Your speed is your only shot at outpacing both big incumbents and scrappy competitors.

But speed isn’t just about cranking out features. It’s about learning. The faster you can experiment, talk to users, gather feedback, and iterate, the faster you move toward product-market fit. It’s a race to the truth.

An early-stage startup’s job is to discover that truth quickly. And that truth usually falls into one of two buckets:

• "Oh shit, it's working!"
• "Oh shit, it's not going to work..."

A lot of startups get stuck in the murky middle: uncertain, slow-moving, and stuck in internal debates. Teams stall. Momentum fades. Motivation disappears. Clarity never comes.

Rapid iteration is the only way to escape that zone. When in doubt, ship. Let the market tell you what’s wrong. Your best ideas will be shaped by real feedback, not internal debate. The worst thing that can happen to a startup isn't failure, it's failing slowly.

Speed Is Your Moat

So the next time you find yourself debating what your company's "moat" is, when you have little or no traction, just pause. Get back to building. Talk to users. Move faster.

Because in the beginning, nothing creates a stronger moat than momentum.

Speed is your only moat.