🔀 answering the moat question with vibes
This week in The Pivot: investors ask what stops the big incumbent from building this — and founders answer with domain expertise and relationships. Every. Single. Time.
Hey friends 👋
Every Monday in The Pivot, we share one mistake we’re seeing founders make, and the quick redirect that makes all the difference — in just 250 words.
Here’s this week’s:
The antipattern: every founder has the same moat.
The investor asks: “What stops [large incumbent] from just building this?”
You say: “We have deep domain expertise and strong customer relationships.”
So does every other vertical SaaS founder in the room. It’s the default answer, and it sounds less like a moat and more like a vibe.
The pitch stalls, you know it’s not landing, but you give the same answer next pitch anyway.
The real question underneath — are you building a startup or a feature? — never gets answered.
The fix: make the moat specific or admit it doesn’t exist yet.
Be detailed.
Write out structurally why the incumbent can’t or won’t build this. Not “expertise” — what does the build actually cost them? What’s their time to market? What’s their incentive to enter?
If your moat is customer relationships: how many, how deep, what’s the switching cost, and why can’t a well-funded competitor replicate that in 18 months?
If you can’t answer those questions, don’t paper over it. Be transparent.
The tool: the 6 differentiators
Your job is to make a credible case, typically based on one or more of the six key differentiators: network, scale, scope, integrations, engagement, and experience.
But remember: this is one of the eight things investors look for. Don’t skip it, and don’t skimp on detail.
Until next week,
—jdm
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