Building a Moat

Author

Matt Ober
March 22, 2024

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Building a moat is hard. Figuring out what that moat is, is the first step. I continue to believe one of the best moats you can build is a unique, proprietary dataset.

Before I get into moats, I wanted to say something about today’s sponsor. I have been testing out the Beehiiv sponsors, and today’s sponsor resonated with me as we recently got new window coverings in our home downstairs. Maybe it’s just a coincidence, but when RYSE was interested in sponsoring the newsletter, it seemed like perfect timing. As we do more window-covering replacements in my house, I will be checking them out. Now on to the moats!

Building a moat is hard and no better way to start building than to figure out a data strategy. How do you get exclusive or unique or proprietary data or content? Everyone and every company seems to be doing some form of web scraping. Not sure there is much of a moat in web scraping unless you are scraping something nobody else is focused on, you have been doing it consistently for years and it is hard for others to catch up, or you are transforming and structuring the web scraped data in a way that others can’t easily replicate. So what moats can you build? Here are a few of my ideas:

  • Call centers- start a call center. Use the latest in AI. Collect unique information from those calls for use in training or insights for your business.

  • Survey data- survey data that is consistent, frequent (daily, weekly, monthly) and that has a good population of respondents is valuable. InitialDataOffering.com has had a bunch of survey datasets launch recently and the inbound interest has been eye-opening!

  • Community discussions- a social network or community. Ribbon.ai has 200k+ people on their platform and everyone is focused on career development, job hunting, and improving their career path. Interesting data and insights from the platform are happening every day. Stocktwits.com has a 16-year moat of unique community insights on markets. Having seen cycles across equities, crypto, and more, there aren’t many datasets out there with as strong of a moat as StockTwits.

  • Give 2 Get- I wrote about this recently, but having contributors of data that get insights or data back. Think sharing contract terms, pricing of services, pricing of securities, estimates on stocks, etc.

  • Predictions- similar to some of the other moats, having a community share structured predictions, whether that is on global elections, stock earnings, potential mergers, or stock prices. Prediction markets have become popular in blockchain/crypto circles and I think the data will become valuable long-term for multiple data buyers

Moat building should be a core value of a company. Many do this via technology and software, but thinking about this from a data angle is something that should be top of mind. As we have seen the explosion in AI companies hungry to buy and license data, building data moats now is a great long-term moat!

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