The Two Moats that Actually Work in the AI Era

Great technology may not be enough to build a defensible business.

An interesting Crunchbase article (https://news.crunchbase.com/) last week looked at 576 venture-backed AI B2B companies and found that two competitive moats stand out: Counter-Positioning and Network Economies.

The first durable advantage, Counter-Positioning, means building a business model that established competitors have difficulty copying without disrupting their existing business.

Network Economies create value as more customers use the product, making the business increasingly difficult to replicate as it grows.

As AI makes it easier and less expensive to build products, technology and features alone may become harder to defend.

That raises an important question for founders: What makes your business difficult to replicate?

There’s a financial side to that question as well.

A true competitive advantage should ultimately show up in the economics of the business. A strong financial foundation, reliable accounting data, and forward-looking CFO insights help founders understand whether that advantage is translating into sustainable growth and value creation.

As the cost of building continues to fall, capital allocation and financial discipline are even more important.

AI can help build a better product. Building a defensible and financially sound business requires more.

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