Economic Moat

The metaphor was coined and popularized by investor Warren Buffett, who spoke of businesses as economic castles protected by moats. “Moat” is from Middle English via Old French “mote,” originally a mound or embankment, later the defensive ditch around it.

  1. noun phrase · /ek-uh-NOM-ik MOHT/

    A durable competitive advantage that protects a company’s profits from rivals, like a moat around a castle.

    A vivid handle for asking the key business question — not “is this good?” but “what stops competitors from copying it?” — covering brands, patents, switching costs, and scale.

    The app has millions of users but no economic moat — a bigger platform could clone it in a quarter.

    A moat is the broad category; economies of scale are one specific source of one — the cost edge a large incumbent has that a small challenger cannot match.