Personal Moats
In evaluating businesses, analysts frequently look for what the business world calls “MOAT.”
What exactly is a moat though?
In architectural terms, a moat is a depression surrounding a castle, city wall, or other fortification, usually but not always filled with water. In earlier times it helped the people on the inside to defend themselves from the people on the outside.
To further strengthen their defense and solidify their moat, some cities or castles even had crocodiles immersed in the water so that no one from the outside could just swim past the water.
As time passed, castles and cities surrounded by water started disappearing, but the word Moat stayed around and transformed its meaning in different industries.
For example, In the business world, companies develop moats too. But they don’t keep crocodiles outside their offices. Rather they create products, develop services, or improve their operational efficiency in such ways that their competitors face a hard time competing with them in terms of cost, value, service, etc.
Moats are sort of an important thing if you want to improve your chances of success.
Take Netflix for Instance,
Netflix is the world’s leading streaming entertainment service, with over 200 million paid memberships in over 190 countries. Netflix offers a wide variety of TV shows, movies, documentaries, and original content across different genres and languages.
Netflix has developed a strong moat over time by building:
A loyal and engaged customer base who value its convenience, quality, and variety of content.
A data-driven and personalized recommendation system that enhances user satisfaction and retention.
A large and growing library of original and exclusive content that differentiates it from its competitors and attracts new subscribers.
A global and scalable platform that leverages cloud computing, artificial intelligence, and machine learning to deliver high-quality streaming and optimize costs.
A visionary and innovative leadership team that constantly invests in new technologies, markets, and formats to stay ahead of the curve.
Netflix’s moat has enabled it to achieve consistent revenue and earnings growth, as well as a dominant market share in the streaming industry. It is pretty difficult for a competitor just to create the library of content that Netflix has created.
Regardless, Netflix’s moat is not invincible, it faces increasing competition from other streaming services, such as Disney+, HBO Max, and Apple TV+, as well as rising content costs, regulatory pressures, and piracy risks.
Although it’s a king now, Netflix will have to continue to innovate and adapt to maintain its moat and its leadership position in the streaming industry.
Just like Netflix, Individuals develop Personal Moats that allow them to be successful too.
For instance Beyonce,
She is one of the most successful and influential artists of all time. She has built a personal moat by being a versatile and talented performer, songwriter, producer, and entrepreneur. She is known for her excellence, creativity, and empowerment. She has mastered her craft and created a loyal fan base by delivering high-quality music and entertainment.
I am sure by now it’s clear that having moats around you is a good thing and it vastly improves your chances of success, but how does one develop one?
Well Erik Tokenberg, a writer suggests one of the best ways is too
Ask others: What’s something that’s easy for me to do but hard for others? What's something I have that’s very difficult for people to reverse engineer?
Or the concept of Ikigai!
To figure out the intersection of what you love, what the world needs, and what you’re good at.
So what sort of moat should one develop when it comes to money?
Well, some of the most heard phrases that are likely also moats are,
Increase your Income
Decrease your Spendings
Have no Debt
And on and on…
Now, I am not saying these are bad choices, but these are not very strong moats to have either. Since there are tons of people out there who are doing the exact same thing.
When it comes to money, much stronger moat are the ones that have nothing to do with money at all. How about you develop a mindset that nothing can break you down?
Imagine for a moment, Money or No Money, you have the capability to keep working towards whatever you have set your mind on. How Strong of a Moat would that be?
Or
Being so versatile that you can change your lifestyle depending upon the money you possess?
More often than not, Less amount of Money is the reason for misery, but having a mindset that is not bothered by such situations which are mostly likely temporary can go a long way in developing moats that very few possess.
Until next time…
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