Moat or Mirage? How to Actually Spot a Durable Business

🐮 Moats Aren’t Just Buzzwords

Everyone says their stock has a moat.
But not all moats are created equal — some are puddles with marketing gloss.

In a world where every SaaS company claims to be “sticky,” how do you tell a real moat from a hype trap?

Let’s break it down the Lazy Bull way:

🧠 1. Brand Power

Real moat: People pay more because it’s your brand.

• Think: Coca-Cola, Apple

• Not: A random app with cute UX.

✅ Quick test: Can the company raise prices without losing customers?

🕸️ 2. Network Effects

Real moat: Each new user makes the product more valuable.

• Think: Visa, Meta, YouTube

• Not: A Discord clone with 100 users.

✅ Quick test: Does more usage = more value to all users?

🔁 3. High Switching Costs

Real moat: Leaving is a nightmare.

• Think: Microsoft Office, Adobe, SAP

• Not: An app that takes 2 minutes to uninstall.

✅ Quick test: Would users need training or data migration to switch?

🏷️ 4. Cost Advantages

Real moat: Company can sell at lower cost and still profit.

• Think: Amazon, Costco

• Not: Any company calling themselves “lean.”

✅ Quick test: Are margins high despite low prices?

🧪 5. IP / Regulation Moats

Real moat: Hard laws or patents protect profits.

• Think: Drug makers, Nvidia chip design

• Not: “We have a secret algorithm.”

✅ Quick test: Are competitors legally blocked from copying them?

🚨 Watch Out for These Mirage Moats

• “AI-powered everything” = buzzwords with no pricing power.

• “Community-first” = zero switching costs and no cash flow.

• “First mover” = means nothing without lock-in.

TL;DR – Lazy Bull Checklist

✅ Pricing power
✅ User lock-in
✅ Better with scale
✅ Can survive disruption
✅ Fat margins or low-cost edge

– Lazy Bull

Disclaimer: This is not financial advice. The content provided is for informational purposes only. Always do your own research