{"id":84131,"date":"2025-06-18T07:00:00","date_gmt":"2021-08-06T17:34:15","guid":{"rendered":"https:\/\/www.saastr.com\/?p=84131"},"modified":"2025-07-07T15:21:50","modified_gmt":"2025-07-07T22:21:50","slug":"whats-your-moat","status":"publish","type":"post","link":"https:\/\/www.saastr.com\/whats-your-moat\/","title":{"rendered":"10 Ways to Build a Moat in SaaS.  But AI is Also Making Them Weaker."},"content":{"rendered":"<div class=\"embed-twitter\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">The real moat in SaaS is brand<\/p>\n<p>Almost every market leader has a really, really good competitor or 2 or even 3<\/p>\n<p>That would honestly do the job just as well<\/p>\n<p>&mdash; Jason \u2728\ud83d\udc7eSaaStr.Ai\u2728 Lemkin (@jasonlk) <a href=\"https:\/\/twitter.com\/jasonlk\/status\/1887163685740695711?ref_src=twsrc%5Etfw\">February 5, 2025<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/div>\n<hr \/>\n<p>A while back we did an extra &#8220;Day 0&#8221; AMA session at SaaStr Annual and several hundred founders came.\u00a0 One asked what the top moats are in B2B and SaaS.\u00a0 At the time, I didn&#8217;t have a great answer.\u00a0 A lot of B2B apps don&#8217;t really have moats, I thought.\u00a0 But that&#8217;s wrong.<\/p>\n<p>Time has gone on, and while moats in B2B may not seem quick as clear as in B2C, they are real.\u00a0 And you gotta at least try to build a few to go long and go big.<\/p>\n<p>And we also need to acknowledge AI has weakened almost all of these moats \u2026 at least to some extent.<\/p>\n<p><iframe title=\"10 Ways Build a Moat in SaaS (Updated)\" width=\"1080\" height=\"608\" data-src=\"https:\/\/www.youtube.com\/embed\/CDlOq1iDNe4?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/www.saastr.com\"  allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n<h3><strong>Let&#8217;s take a look at moats in B2B:<\/strong><\/h3>\n<ul>\n<li><span style=\"text-decoration: underline;\"><strong>Brand<\/strong><\/span>.\u00a0 Brand can be a big moat in B2B, and still is for the most part.\u00a0 Most customers just want to pick the app they&#8217;ve used and heard of.\u00a0 We all underestimated this in the earlier days of SaaS.\u00a0 There may be 100+ CRMs today, but most of us just want to pick the one we know.\u00a0 <a href=\"https:\/\/www.saastr.com\/has-hubspot-taken-over-the-startup-world-from-salesforce\/\">In fact, most of us in CRM will still just pick HubSpot or Salesforce today, unless we need a vertical solution<\/a>. \u00a0Even OpenAI or Claude \u2026 why did you pick one? And how much energy will you have in a few years to keep trying new solutions? \u00a0There\u2019s a reason Sam Altman is everywhere. \u00a0He\u2019s investing in brand, at least in part.\n<ul>\n<li><span style=\"text-decoration: underline;\">But \u2026 but \u2026 AI has led to an explosion of budget going to new apps and new discovery. \u00a0This has weakened brand moats<\/span>. \u00a0It\u2019s put a lot of deals into play, as customers look at both new AI-first vendors and the classic folks.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.saastr.com\/has-hubspot-taken-over-the-startup-world-from-salesforce\/\"><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter wp-image-302116 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2021\/08\/crm.jpg?resize=610%2C659&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"610\" height=\"659\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 610px; --smush-placeholder-aspect-ratio: 610\/659;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter wp-image-302116\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2021\/08\/crm.jpg?resize=610%2C659&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"610\" height=\"659\" \/><\/noscript><\/a><\/p>\n<ul>\n<li><span style=\"text-decoration: underline;\"><strong>Data &amp; Data Lock<\/strong><\/span>. Data lock is real.\u00a0 LinkedIn owns the human record, Workday does in part in the enterprise as well.\n<ul>\n<li>And yet \u2026 MCP is already beginning to weaken data moats. \u00a0Just a bit, but it\u2019s already begun. \u00a0HubSpot allowing ChatGPT to access its data is just the start.\u00a0 Although Aaron Levie and other leaders do see it otherwise:<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><iframe title=\"AI Moats: How Box&#039;s CEO Sees MCP and More Enhancing Value &amp; Monetization\" width=\"1080\" height=\"608\" data-src=\"https:\/\/www.youtube.com\/embed\/SyL6cOuI7WM?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/www.saastr.com\"  allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n<ul>\n<li><span style=\"text-decoration: underline;\"><strong>Structured Data<\/strong><\/span>.\u00a0 Even if data resides in many silos, structuring makes it unique.\u00a0 Exporting your Customer records from Salesforce or really almost any app is often a huge task.\n<ul>\n<li>Except \u2026 AI is making it far easier than ever to structure and re-structure data. \u00a0What used to be a massive mapping and restructuring project can now just be given to OpenAI and other vendors running AI tools here.<\/li>\n<\/ul>\n<\/li>\n<li><strong><span style=\"text-decoration: underline;\">Partners + Ecosystem<\/span>.<\/strong>\u00a0 The top partners in the Salesforce, Shopify, etc. ecosystems do get most of the leads.\u00a0 And this compounds over time.\u00a0 The AEs, the biz dev folks, tend to send deals to the partner everyone trusts and knows.\n<ul>\n<li>This is still true, but the rise of new AI-native leaders has disrupted the classic 1 or 2 leaders that attach to each platform. \u00a0There\u2019s just so much more competition today, and the top partners are given the break-out leaders mind share too, not just the established ones.<\/li>\n<\/ul>\n<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>Integrations<\/strong><\/span>.\u00a0 Most vendors only integrate one third party in each category, maybe two.\u00a0 Zapier is integrated everywhere.\u00a0 Maybe 10x more than anyone else &#8230;\u00a0 So also, build more of them.\u00a0 Before someone else does.\n<ul>\n<li>But again \u2026 MCP is already starting to change the game here, with 5,000+ MCP servers online since the beginning of the year.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.linkedin.com\/posts\/313373_this-weekend-i-switched-my-work-chat-from-activity-7335284067099185154-oxLw?utm_source=share&amp;utm_medium=member_ios&amp;rcm=ACoAAAAsKtMBHQPJ9rgxpUs8M6pSxrAYCXIX8oY\"><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter size-full wp-image-314876 lazyload\" data-src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-scaled.jpeg?resize=1000%2C982&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"1000\" height=\"982\" data-srcset=\"https:\/\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-scaled.jpeg 1000w, https:\/\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-980x962.jpeg 980w, https:\/\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-480x471.jpeg 480w\" data-sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1000px, 100vw\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1000px; --smush-placeholder-aspect-ratio: 1000\/982;\" \/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter size-full wp-image-314876\" src=\"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-scaled.jpeg?resize=1000%2C982&#038;quality=70&#038;ssl=1\" alt=\"\" width=\"1000\" height=\"982\" srcset=\"https:\/\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-scaled.jpeg 1000w, https:\/\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-980x962.jpeg 980w, https:\/\/www.saastr.com\/wp-content\/uploads\/2025\/06\/IMG_7591-480x471.jpeg 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1000px, 100vw\" \/><\/noscript><\/a><\/p>\n<ul>\n<li><span style=\"text-decoration: underline;\"><b>Agencies and Implementation <\/b><b><u>Partners<\/u><\/b><b>.<\/b><\/span>\u00a0 Third parties want to specialize in helping customers deploy just a handful of leading apps.\u00a0 This is a big part of HubSpot&#8217;s GTM, and of many leaders in the Shopify ecosystem.\u00a0 Own the agency relationships for SMBs, own that Accenture relationship in the enterprise, etc. &#8212; and it&#8217;s really tough for others to break in, absent strong organic customer demand.\n<ul>\n<li>\u00a0And yet \u2026 agencies themselves are under threat as AI itself makes onboarding easier. \u00a0You can see in our SaaStr AI Summit 2025 deep dive with Yamini Rangan, CEO of HubSpot, that AI has already changed their relationships with agencies, and what those agencies do to drive value deploying HubSpot:<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><iframe title=\"AI and The Future of Sales, Marketing &amp; CS with HubSpot CEO Yamini Rangan\" width=\"1080\" height=\"608\" data-src=\"https:\/\/www.youtube.com\/embed\/yGlDQV-lVNc?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/www.saastr.com\"  allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n<ul>\n<li><strong><span style=\"text-decoration: underline;\">Long-Term Contracts.<\/span><\/strong>\u00a0 Yes, we hate this.\u00a0 But getting customers to sign 3+ year contracts does work if there&#8217;s enough value to earn it.\u00a0 It&#8217;s not perfect. \u00a0Competitors can buy out these contracts, and break them.\u00a0 But 3-year contracts <em>are<\/em> a partial moat.\u00a0 They do slow down switching, because they add friction to switching.\n<ul>\n<li>But most AI leaders don\u2019t force you into long-term contracts. \u00a0At least not to get going.<\/li>\n<\/ul>\n<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>Using Massive Amounts of Capital To Play In Every Segment<\/strong><\/span>.\u00a0 Dominant-dominant strategy is tough to play well, but being in every single segment when the competition can&#8217;t afford to be is a form of moat.\u00a0 The 2.0 version of this may well be Rippling, playing to win not just in multiple segments, but 25+ products at the same time from the get-go.\n<ul>\n<li>But \u2026 AI startups are soaking up 70%+ of all VC cash now.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><iframe title=\"Rippling CEO Parker Conrad&#039;s Theory of the Compound Startup: Disrupting How We Think About Software\" width=\"1080\" height=\"608\" data-src=\"https:\/\/www.youtube.com\/embed\/dJ3DT_7jzds?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/www.saastr.com\"  allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n<ul>\n<li><span style=\"text-decoration: underline;\"><strong>Being &#8220;The Most Enterprise&#8221; Vendor.<\/strong><\/span>\u00a0 If you are the most secured, most trusted, most 2FA, most HIPAA, most SOC-2, most everything vendor &#8230; you will win where that matters.\u00a0 And it matters a lot in the enterprise.\n<ul>\n<li>Still a big moat, but the big push to bring AI into orgs is leading to more budget going to new vendors. \u00a0And incrementally more risk being taken here. \u00a0Enterprises are bringing in vendors like Decagon, Glean, Sierra, Loveable, Windsurf, etc. at a pace they wouldn\u2019t have pre-AI.<\/li>\n<\/ul>\n<\/li>\n<li><span style=\"text-decoration: underline;\"><strong>No Contract At All<\/strong><\/span>.\u00a0 Yes, a long-term contract is a moat.\u00a0 But there&#8217;s a &#8220;carrot&#8221; flip-side: making it 10x easier to onboard than the competition does.\u00a0 Arguably, this was part of the wedge Apollo used to gain share over market leader ZoomInfo.\u00a0 A deep dive with their CRO below.\n<ul>\n<li>AI challenges this strategy by making it even easier to try \u2014 at least in many cases. \u00a0Many AI leaders are a challenge to existing vendors here again with monthly payments and little drama when you off board. \u00a0It\u2019s just easier to pick them when you can leave easily anytime.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><iframe title=\"CRO Confidential: How to Sell in a Hyper-Competitive Space with Apollo CRO Leandra Fishman\" width=\"1080\" height=\"608\" data-src=\"https:\/\/www.youtube.com\/embed\/_wONtKu-8so?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/www.saastr.com\"  allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n<h3><strong>So the meta-point is there are actually a lot of moats in B2B, of various strengths. \u00a0But \u2026 AI in many ways is making them all weaker.<\/strong><\/h3>\n<p>As you plan for next year, maybe that&#8217;s a place to agree on an initiative or two.\u00a0 A company goal.\u00a0 And maybe a priority change here or there.<\/p>\n<h3><span style=\"text-decoration: underline;\"><strong>-&gt; Ask the team at your next planning session &#8212; What&#8217;s Our Moat?\u00a0 And How Do We Reinforce it Next Year?<\/strong><\/span><\/h3>\n<p>And see where that goes. It probably goes somewhere good.\u00a0 If you are going long, that is.<\/p>\n<div class=\"embed-twitter\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">The \u201cwhat\u2019s your moat?\u201d question for early stage companies ignores the fact that if a one year old company can build a moat, it\u2019s NOT a real or deep moat. Real defensibility take significant time to build. Correct phrasing; \u201cWhat will be your moat?\u201d<\/p>\n<p>&mdash; Gokul Rajaram (@gokulr) <a href=\"https:\/\/twitter.com\/gokulr\/status\/1348827890087940099?ref_src=twsrc%5Etfw\">January 12, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/div>\n<p>&nbsp;<\/p>\n<p><iframe title=\"Embedded post\" data-src=\"https:\/\/www.linkedin.com\/embed\/feed\/update\/urn:li:ugcPost:7339034357103243264?collapsed=1\" width=\"504\" height=\"935\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The real moat in SaaS is brand Almost every market leader has a really, really good competitor or 2 or even 3 That would honestly do the job just as well &mdash; Jason \u2728\ud83d\udc7eSaaStr.Ai\u2728 Lemkin (@jasonlk) February 5, 2025 A while back we did an extra &#8220;Day 0&#8221; AMA session at SaaStr Annual and several&#8230; <br \/><a class=\"more-link fade\" href=\"https:\/\/www.saastr.com\/whats-your-moat\/\">Continue Reading<\/a><\/p>\n","protected":false},"author":19,"featured_media":84133,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_custom_social_share_image":0,"_facebook_share_type":"default","_twitter_share_type":"default","_linkedin_share_type":"default","_pinterest_share_type":"default","_linkedin_share_type_page":"","_instagram_share_type":"default","_medium_share_type":"default","_threads_share_type":"","_selected_social_profile":[]},"categories":[24898,31,30,24987],"tags":[],"class_list":["post-84131","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ai","category-blog-posts","category-growth","category-saastr-ai"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.saastr.com\/wp-content\/uploads\/2020\/10\/jpegmoat.jpg?fit=850%2C537&quality=70&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5oib2-lSX","jetpack_sharing_enabled":true,"fifu_image_url":"https:\/\/www.saastr.com\/wp-content\/uploads\/2021\/08\/crm.jpg","_links":{"self":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/posts\/84131","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/comments?post=84131"}],"version-history":[{"count":11,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/posts\/84131\/revisions"}],"predecessor-version":[{"id":315931,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/posts\/84131\/revisions\/315931"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/media\/84133"}],"wp:attachment":[{"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/media?parent=84131"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/categories?post=84131"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saastr.com\/wp-json\/wp\/v2\/tags?post=84131"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}