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Leaders Letter 97 – Your Infected Moat Is An Internal Disease

Dear Leaders, Over the last decade, a moat (business moat / economic moat) is what every business has been searching for and attempting to build. Believe it or not, it is a lot harder than most executives think. 

“A company's moat refers to its ability to maintain the competitive advantages that are expected to help it fend off competition and maintain profitability into the future.” - Source

As someone who has been an operator on the Product, Marketing and Growth sides, I have heard and used moat hundreds of times. 

In a recent coffee catch up, a couple of industry friends and I discussed an important area that goes unspoken, and what I dubbed “the infected moat”.

When the believed competitive advantage blinds your company-wide strategy, it infects your internal messaging and affects your company so much it starts to hinder the business performance and your company culture

Misleading and blinding your people is one of the most damaging aspects of company culture and can cause decay to the foundation of the business. 

You stop building, you rely on optimising the final steps of the funnel and you reduce your budgets and hiring based on infected beliefs and data. 

One of the most common infected moats is believing you have network size or quality of data which means you have the best product in the market. 

You rely too heavily on your data, you rely too heavily on the algorithms and you become a Blackberry (vs Apple), Yahoo (vs Google) and most recently an Instagram (vs TikTok).  

This comes down to the management of the company, the misunderstanding of the influence of the brand, the power of the product and the state of the market or a blind obsession with competitors versus being informed by your customers and competitors. 

Something I recommended is to audit your business, audit your product, audit your marketing, audit your growth activities and go deeper than reviewing just top-level insights and competitors’ actions. 

Don’t allow your moat to become infected, impact your people and performance and don’t develop a blind spot that is of your own doing. 

This week focus on reviewing your moat, auditing it and planning to evolve. 

Thanks and have a great week,

Danny Denhard

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