Narrow Moat
Categories: Company Management
A famous Warren Buffett notion.
Good companies have wide moats around them. That is, they own huge, complex tech, mountains of patents, and 30-year deals with Teamster truckers, among other things that would be almost impossibly hard for a competitor to knock off. That'd be a wide moat.
So what's a narrow one? A company that is fragile, exposed, um....naked.
In the tech world, companies come and go all the time. Many come public, still fragile, with meekly defensible product in a hostile environment. Narrow moats allow hungry-for-growth competitors to jump over that narrow moat, clone or copy their intellectual property, and take away, say, 30% of their customers, stunting growth, crushing their stock price, leading to the best engineers then leaving for a new startup, and the demise of that narrow-moated company just around the corner.
Like your horizons in life, you want your moats wide.