Moat Definition
Position in HORIZON workflow: v0.2 Competitive Landscape → v0.3 Moat Definition → v0.3 Pricing Model Selection
Consumes
This skill requires prior work from v0.2:
- Landscape map artifact (from Competitive Landscape Mapping) — Current behavior documentation, feature matrix, competitor analysis
- CFD-* entries (competitive intelligence, from Competitive Landscape Mapping) — Documented competitors with pricing, features, user feedback
- BR-* product type entry (from Product Type Classification) — Classification constrains which competitors are relevant to analyze
This skill assumes v0.2 analysis is complete with documented competitors.
Produces
This skill creates/updates:
- CFD-* entries (competitor moat analysis) — Assessment of each competitor's defensibility by moat type
- BR-* entries (targeting rules) — Constraints derived from moat analysis, defining where to compete vs. avoid
- Moat strength inventory artifact — Summary of competitor moats with vulnerability signals
All CFD moat analysis entries should include:
confidence: 2-3/5(based on public evidence + user interviews about switching friction)- Evidence source (pricing pages, reviews, customer interviews)
- Forward target: "Would move to 4/5 if we interview 5+ current/former customers about switching costs"
Example moat analysis entry:
CFD-055: Competitor Moat Analysis — Notion
Competitor: Notion
Primary Moat Type: Switching Costs (data lock-in)
Moat Strength Tier: Strong
Confidence: 3/5 (source: public-research + 2-user-interviews)
Date: 2026-02-01
Switching Cost Quantification:
- Financial: Multi-year contract, no early termination ($0 direct cost)
- Time/Effort: 20+ hours migration, team retraining
- Data Migration: Proprietary database format (complex export)
- Workflow Retraining: Unique templates, team habits
- Integration Rework: Deep Slack/GitHub dependencies
Total Switching Cost: $3K in labor + 20 hours = Material friction
Moat Verdict: Strong — switching costs >$3K + meaningful time investment
Vulnerability Signal: SMB segment with small teams; they use <20% of feature set (opportunity for simpler tool)
Targeting Decision: Avoid direct competition. Wedge in SMB with simplified, cheaper offering.
Evidence:
- CFD-042 (landscape): Reviews show enterprise love; SMB complaints focus on cost + complexity
- CFD-015 (value hypothesis): SMB would save $12,500/year with simpler tool
Next Target: "Would move to 4/5 if we interview 5+ SMB teams about exact switching cost dollars"
Moat Type Taxonomy
Every moat falls into one of six types. Identify primary + secondary moats per competitor:
| Moat Type | Definition | Strong When | Weak When | |-----------|------------|-------------|-----------| | Switching Costs | Friction to leave (data, workflow, contracts) | Multi-year data, deep integrations | Easy export, monthly contracts | | Network Effects | Value increases with users | Two-sided marketplace, content platform | Single-player tool, linear value | | Data/IP | Proprietary data or algorithms | Unique training data, patents | Commodity ML, public datasets | | Brand/Trust | Recognition, credibility | Regulated industry, high-risk decisions | Low-stakes, undifferentiated | | Scale/Cost | Volume economics | Infrastructure-heavy, marginal cost near zero | Labor-intensive, linear cost | | Regulatory | Compliance barriers | Certifications required, government contracts | No compliance requirements |
For micro-SaaS: Switching costs and brand/trust matter most. Network effects and scale rarely apply.
Moat Strength Tiers
Rate each competitor's defensibility:
| Tier | Criteria | Evidence Signals | Targeting Implication | |------|----------|------------------|----------------------| | Impenetrable | Multi-layered moat, 10+ years data lock-in | "Would take years to switch" | Avoid direct competition | | Strong | Significant switching friction, 1-2 year contracts | High NPS + low churn despite complaints | Target underserved segments only | | Moderate | Some friction, workarounds exist | Churn 5-10%, export options | Wedge opportunity exists | | Weak | Easy to replace, commodity offering | Monthly plans, high churn, price shopping | Direct competition viable | | Eroding | Former strength declining | New alternatives gaining share | Aggressive targeting |
Gate rule: Don't compete where incumbent has Impenetrable or Strong moat unless targeting segment they explicitly ignore.
Switching Cost Inventory
Quantify ALL switching costs — the sum determines moat strength:
| Cost Type | High Impact | Low Impact | How to Assess | |-----------|-------------|------------|---------------| | Financial | >6mo contract, early termination fees | Monthly billing, no penalty | Check pricing page terms | | Time/Effort | 40+ hr migration, retraining | <4 hr setup, familiar UX | Trial the competitor | | Data Migration | Proprietary format, no export | Standard export (CSV, API) | Test export function | | Workflow Retraining | Unique methodology, team habits | Standard patterns | Read onboarding docs | | Integration Rework | Deep API dependencies | Standalone tool | Map their integrations |
Calculation: Sum hours + dollars. >$5K or >40hr = material switching cost.
Targeting Decision Framework
Use moat analysis to determine where to compete:
Moat Impenetrable/Strong → DON'T COMPETE HERE
↓ unless
Target ignored segment (SMB, specific vertical)
Moat Moderate → WEDGE STRATEGY
↓ identify
Entry point that bypasses switching friction
Moat Weak/Eroding → DIRECT COMPETITION
↓ execute
Feature + price attack on their core
Wedge Opportunity Signals
A wedge exists when:
- Competitor moat doesn't apply to specific segment
- One feature has LOW switching cost (can start there)
- Integration allows coexistence (not replacement)
- Price sensitivity > switching friction
Analysis Workflow
Step 1: Pull Competitor Data
Retrieve CFD- entries from v0.2 Competitive Landscape. For each competitor, you need: pricing, complaints, feature set.
Step 2: Identify Moat Type
For each competitor, determine primary moat type. Use evidence from reviews, pricing structure, integration depth.
Step 3: Rate Moat Strength
Apply tier criteria. Flag if insufficient evidence (Tier 4-5 confidence).
Step 4: Inventory Switching Costs
Complete the 5-category switching cost assessment. Quantify hours + dollars.
Step 5: Identify Vulnerabilities
Where is their moat weakest? Which segments do they ignore? What's eroding?
Step 6: Generate IDs
CFD entries (customer_feedback.md): Template: assets/cfd-moat-analysis.md
CFD-MOT-###: [Competitor] Moat Analysis — [Moat Type], [Strength Tier]
BR entries (BUSINESS_RULES.md): Template: assets/br-targeting.md
BR-TGT-###: [Targeting Rule] — based on [Competitor] moat weakness
Anti-Patterns to Avoid
| Don't | Do Instead | |-------|------------| | "They're big" | Specify which moat type + evidence | | Assume low switching cost | Quantify: hours + dollars | | Only analyze direct competitors | Include Type 4-5 (workarounds, inertia) | | Underestimate integration moat | Map actual dependency depth | | Ignore eroding moats | Track signals: new entrants, complaints | | Target where moat is strong | Find the segment where moat doesn't apply |
Output Requirements
Before advancing to Our Moat Articulation:
- [ ] ≥3 competitors with moat type identified
- [ ] ≥2 competitors with switching costs quantified
- [ ] Moat strength tier assigned (with evidence)
- [ ] Targeting decision per competitor (compete/avoid/wedge)
- [ ] CFD-MOT entries created (≥3)
- [ ] BR-TGT entries created (≥2)
Downstream Connections
| Consumer | What It Needs | Format | |----------|---------------|--------| | v0.3 Our Moat Articulation | Where competitors are weak, what moats work | CFD-MOT entries | | v0.3 Pricing Model | What price points bypass switching friction | BR-TGT entries | | v0.5 Red Team | Risks of competitor response | Moat strength tiers | | v0.9 GTM | Positioning against competitor moats | Targeting rules |
Detailed References
- Good/bad examples: See
references/examples.md - CFD-MOT template: See
assets/cfd-moat-analysis.md - BR-TGT template: See
assets/br-targeting.md