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2.8AdvancedModule 02 · Design Your Business

Unfair Advantage, Moat Builder

A competitor launches something similar. An investor asks 'what stops someone from

The prompt

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2.8Unfair Advantage, Moat Builder
Act as a competitive strategy advisor focused on economic moats. My business : [DESCRIBE WHAT YOU DO AND WHO YOU SERVE] Stage : [REVENUE STAGE - PRE / EARLY / SCALING] Assess my moat across all five types: NETWORK EFFECTS : Does value increase with more users? COST ADVANTAGE : Can I produce cheaper than competitors? SWITCHING COSTS : How painful is it for customers to leave? INTANGIBLE ASSETS : Do I have brand, IP, or licence advantages? EFFICIENT SCALE : Am I in a market too small for competition? Rate each 1–5. Identify my strongest moat and the fastest moat I could build from my current position. Give 2 specific actions to widen my strongest moat. Network Effects Value increases with user base growth. Cost Advantage Lower production costs enhance competitiveness. Switching Costs Competitive High costs deter customers from switching. Protection Intangible Assets Brand reputation and patents provide protection. Efficient Scale Economies of scale reduce per-unit costs.
LabelsReplace theseSwap the role below

LabelsReplace theseSwap the role below

Pro tip, from the book

Network effects are the most powerful moat but the hardest to build. If your product has any element where more users create more value even indirectly, design your product and go-to-market specifically to accelerate that loop. Most founders have a network effect they don't know they have.

Who should run this prompt

Module role profile

Who should stress-test your business model? Business models fail quietly — not all at once, but one flawed assumption at a time. The roles on this page represent the perspectives that expose those assumptions before the market does. Use internal roles to build and refine your model. Use outside perspectives to find the gaps your optimism is covering.

Choose any role to drop it into the prompt above. Only the highlighted opening clause changes — the rest of the prompt stays exactly as printed.

Internal rolesThink from inside the organisation
Outside perspectivesChallenge your blind spots

◆◆◆◆◆ → ◆ seniority, board level down to specialist outside the organisation

How to make any role sharper

  1. Add years of experience: "...with 15 years in enterprise SaaS" produces different depth than just the title.
  2. Add what they care most about: "You care most about [X]" shapes every word of the output.
  3. Add their communication style: "Be direct. Flag risks first. No jargon." changes the tone entirely.
See also: 1.3 Role Prompting - The Expert Chair

Use this when

The problem it solves

copying this?' You don't have a clear, confident answer. Your business is growing but feels fragile.

How the framework works

From the printed page

Warren Buffett's concept of an economic moat describes a sustainable competitive advantage that protects a business from competition the way a moat protects a castle. The five types of moat are: Network Effects (the product gets better as more people use it), Cost Advantage (you produce at lower cost than anyone), Switching Costs (customers are locked in by habit, data, or integrations), Intangible Assets (brands, patents, licences), and Efficient Scale (a market so small only one player can profitably serve it). Most businesses have weak or no moats. Building one is a strategic choice.

The method, in four moves

Do these in order
1

Identify which of the five moat types you currently have, be honest.

2

Rate each on a scale of 1–5 for strength. Anything below 3 is not a real moat.

3

Identify which moat type is most achievable given your current position.

4

Build moat-widening into your product and business roadmap deliberately. Identify what protects you that competitors cannot easily copy Amazon's unfair advantage wasn't its website , it was the proprietary logistics infrastructure it built over 15 years. When AWS launched, Amazon was already operating data centres at a scale no competitor could match affordably. The moat wasn't the product. It was the underlying capability that took a decade and billions to build and that no startup could replicate quickly. IN PRACTICE

Where the framework comes from

Warren Buffett, Berkshire Hathaway annual letters — moat concept, 1980s onwards

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Prompt extracted18 Sept 2026
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