Execution as a moat

Yesterday, I described the path from ambition to outcome as the messy, messy middle.

When valuing companies, people often refer to economic moats — a metaphor popularised by Warren Buffett in his 1995 shareholder letter. He said, “In business, I look for economic castles protected by unbreachable moats”. He was describing the sustainable advantages a company has that can protect it from competitors.

It is not uncommon to have investors ask tech entrepreneurs seeking funding about their moat. Essentially, they want to know how the team will prevent others from sweeping up the opportunity they’ve identified.

The answer to this question is typically something strategically valuable that the company or entrepreneurs have done in the past. For example, the founders might have niche expertise, or they might have acquired a thorny license, or they might have already established a network effect in the product that allows them to own distribution.

But I have been thinking recently about how execution itself can be a moat. It’s the idea that even with the same strategy as others, a person can create a sustainable advantage by trudging through the middle and just getting the work done. And this can be a moat, because as we have established, execution is uncomfortable, and so most people will simply avoid it. By so doing, they give the upper hand to the few who follow through.

This is not to say that execution itself is enough. If everyone else is executing on the same things, then of course, you need other elements— a good strategy, speed, execution quality, a moat unique to your field. But in many cases, simply being the one who actually does the work required gets you pretty far.

Here’s a particularly funny (and sad) anecdote about how messy the middle can be. Risevest’s founder shared this video of him delivering fuel to his team to keep them productive during a time of fuel scarcity in Nigeria.