Debunking Brands as Moats


The idea of Brands as moats is a popular axiom


It is after all one of the five popular business moats (Think: Brand, Secret, Toll, Switching and Price) utilised by value investors and venture capitalists when evaluating a company


Theory would have it the moat is your competitive edge.


The gap between you and the competition


But it's flawed branding strategy


Think like an investor or VC and you'll be thinking you need to build a moat.


But the problem is Brands are not moats. They are bridges.


Branding is the business of designing connections with customers


Your brand is the bridge that spans the chasm between you and the customer. Between you and the prospect. Between you and the market


Ultimately branding is the bridge between you and the sale


The moat is the chasm. The great unknown in the prospect's mind. The gap between you and the sale.


Without a recognisable brand their is no connection. No way of crossing the chasm


By investing in brands we build bridges to help prospects to safely cross the chasm


Global brands like Apple build multi-lane super highways to fast track the buyers journey across the divide


Start-ups pay the ferry man (Google, TikTok or Facebook) to boat their prospects one by one across the murky waters


Alternatively they invest in 100's of rickety rope bridges (think: posts, shares, likes, comments, tweets) on social media


Either way all of these things are an investment in building bridges to make the journey across the dark waters a little easier for the customer


Branding isn't about digging moats. It isn't about making things harder. It's about making things easier.


It's about building connections… It's about reaching out to your customers… to the wider market


It's all about building bridges


It really is that simple


So have a think about that... at least until next time



BTW, the harsh truth is, the only time a business pulls up the draw bridge and widens the moat is when they have everything to lose and nothing new to offer

Originally Published Spring 2021. What are we talking about today? Follow us on Twitter
Copyright Digital Partners Pty Limited 2012-2021