10 Business Moats That Actually Protect Your Marketing

All right, Neil. So, you know, we're going to talk about, we're going to talk about 10 business moats that actually protect your marketing. Okay. So the first business moat we're going to talk about today, the first one is switching costs. And what switching costs are is when you think about, there's a, there's a great strategy book out there called The 7 Powers. And one of the powers in there is switching costs. And so one example of this would be, let's say you have an agency and you actually happen to offer a bunch of different services. Okay. So not, you don't just offer SEO, you offer SEO, paid media, CRO, ad creative, And a bunch of other things, right? Like influencer marketing, everything, the full stack. That makes it harder even if you're performing at a B- across the board. Even if you're number 1 at SEO, people are going to rather— they're going to— they want to go with the provider that can provide more, right? They want more full service. And so one of the moats that will protect your marketing is switching costs, right? And so when you think about— because that is protecting your business ultimately, and these things kind of go hand in hand. So that's number 1.

Number 2, funny enough, I wasn't going to look at the list, but my number 2 was similar to the list. I think it's the same thing. I think in marketing, one of the biggest most is your brand because you've heard the saying, you don't get fired for hiring IBM. You can say the same for McKinsey, Accenture, Deloitte. Look at Deloitte and all the government projects that didn't come to fruition. I'm not saying they suck or they fail.

$74 billion.

But it's a reality and they keep getting hired.

Why?

Because Deloitte, Has a really powerful brand. If someone hires you and you have a really strong brand and they don't get the results and everyone in the industry knows of your brand, the person, their boss will be like, well, you hired a really good person, really good company. So, eh, you try. If you hire a company that's not known, really tiny, unknown brand, and something goes wrong, they'd be like, why'd you hire this company? No one knows them. They don't have a proven track record. This is risky. You're taking a gamble here.

Mm-hmm.

Brand carries a lot of weight. It takes 10+ years to really build a strong brand, but that is a strong moat in business and marketing.

And you can also erode that brand in seconds. This is what Warren Buffett said, right? It takes a lifetime to build a brand. It takes minutes to destroy it. So you have to be careful.

Yeah, and in his annual letters, do you know what he used to always say to people when it came to their brand?

What?

If you have a decision to make that would cost you short-term profits or long-term brand, like to hurt your brand in the long run.

Yep.

Take the short-term revenue hit, like never do anything to mess up the brand.

Another one would be, this is digressing a little bit, but if you wouldn't even hold it for 10 seconds, if you want to hold it for 10 years, don't even hold it for 10 seconds. That relates to investing. But anyway, I digress. So the next one is on process power. And so what process power is, is the actual strength of the process you have.

Okay.

So I'll give you an example. So Toyota is known for their process power. When everyone was making— everyone still makes a lot of cars today, but everyone was looking at Toyota like, how are they so efficient? How is it that they can crank out so many cars than other people before? Nowadays, I mean, Tesla's kind of really up there when it comes to manufacturing, but also process power ties in with your marketing too. How you go about creating your content, how do you think about strategizing for, you know, your long-form content? How do you think about redistributing it? How do you think about chopping it up? Right. That can tie in with your marketing, but also process power for your business too. It could be how you do your work for your clients, how you interact with your clients. All that stuff matters. And then how do you make sure you hold people accountable so the process doesn't start to fall apart, especially if you're a very people-oriented business?

Yeah. Number 4, community. If you can build a really strong community, you'll have a really loyal following of evangelists who'll keep promoting your brand over others. That goes a really long way. But the key with the community, and this is why it's a good moat as long as you do it right, is you got to actually care for your community and be there and continually hear them out and adapt based on what they're saying and their needs are. You can't just have a community, it be really strong, and then all of a sudden if your community's giving feedback on something, you just ignore it. A great example of this is Digg back in the day. The Digg users were part of the Digg community. It was owned by Kevin Rose, extremely popular.

It was like Reddit, guys.

Yes. And he made changes that people really hated and a lot of the community left. And they went to Reddit and they didn't care to come back. And eventually Digg fell and Reddit is now a multi-billion dollar company.

Fun fact, Neil used to be a super digger. I was like, that was like a little before my time. But yeah, Neil's a super digger. He was like always on top, right? Yeah. Anyway, next one would be network effects. And so network effects, when you think about using like Instagram or you think about using WhatsApp, the more people that use the network, the more valuable it becomes. And so not every business necessarily has network effects, but I do believe that now that most people can build things, I think we're going to start to see more of these mini networks. And a community, you can say, is a mini network. But I do think that because you and I, anybody can vibe code whatever we want to build now, I think we're going to start to see more networks come up. So number 6 is you.

All right, number 6, speed. The quicker you can move, the better off you're going to be. It's shocking how slow people are, even with AI. You have all these tools at your fingertips. There's no reason why you just can't get stuff done faster. See, isn't AI so good?

Yeah.

Okay, next one is 7, I think. So because so many people right now are able to vibe code whatever they want, because you, me, my, you know, my dad, I guess, they can— you can vibe code anything you want now. And people think that whatever you build, people are just going to come to it. That's not the reality. Distribution often beats product and distribution tastefully. I'm not saying just go go and run ads, right? Like that's certainly powerful. You gotta think about your creative, all these different things. You gotta think about where your audience is hanging out. And so any— and I'll actually flip both too, because I do think, and we'll talk about the SaaSpocalypse in a little bit, but I do think in the next couple years or so, a lot of software is just gonna be given away for free, and that's gonna be the way of getting people in the door. And so in some cases, product kind of becomes distribution, but distribution is still kind of the lead domino. And you think about, I'll just use you as an example, Neil. The reason why in my mind MP Digital was able to grow so quickly in the beginning was because of distribution.

Yes.

Yeah. It wasn't because you had some kind of— the distribution was the secret sauce in my mind.

Yeah. And I would say number 8.

Yeah.

I would say a big thing is network and not network the way you described it. That is an effective moat as well. But I'm talking about who do you know? If You work with amazing people on your team and you yourself have been in the space for a while or have been networking for a while. If you have good strong contacts with people who could be your ideal customers, it helps the business grow much faster. People rather do business with people they know and like, the like part is really important, than random strangers. So build up your network. Eric and I have been networking for, call it 20+ years, and a lot of the deals we work on today are from people we connected with 10+ years ago. Your network truly is your quote unquote net worth that people have been saying for so many years. It's just more so you got to focus on not just building a network, but building those relationships with people within your network. So when it comes time to doing business, they're much more likely to do it with you than some other stranger.

Dude, let me show you this real quick. So you can see on my screen over here, this is my Telegram bot, right? I call him Alfred, like Alfred from Batman. He has a little butler hat too. Look at that. Okay. Right. So, So anyway, you can see it's like, oh, who this person is over here. Okay, they're in this ABM role, 3 years over here, spend is $300 grand a month, $3.6 million a year on ABM stuff, okay? Discovery call was like this time, explicitly said she's figuring out a gap, uses these tools over here, here's the gap. So it basically, talking about relationships, this is my ultimate relationship hub, right? And then not only that, look, it crafted some copy here. Hey Neil, great connecting last Friday. It's been over a year, so it's a little wrong there. Been thinking about what you said regarding the ad personalization gap, which is what she said on the call, right? You mentioned exploring competitor and one deeper Sixth Sense integration for landing pages. That's literally Karat's sweet spot. Would you be open to a quick 15-minute demo focused specifically on the one-to-one landing page personalization you asked about? And then here's the context over here. Key question, targeting enterprise accounts greater than 1,000 employees. And so this is a good example of the— it's not just building your network, the relationships, like it's also how do you mine it, right? And so when Neil told me about how he's been just making sure that he's proactive about it, I'm like, I have very bad memory. I just need something to be proactive for me. So every day I get a deal of the day thing. It's kind of like, remember, what's the website? Was it Whoop or not Whoop?

Woot.

Woot. Yeah, yeah. Every day you get a deal of the day.

New TV half off, cell phone half off, headphones 1/10 off.

Exactly.

So that's how I see it.

So anyway, I digress a little bit, but the next one, I think number 9 from my side, really this one's a toss-up. So I'm going to go with I'm going to go with talent moats. No matter how good, you know, your distribution is, how good my distribution is, everything ultimately business moat-wise comes down to the people. I don't care if you have a product business, I don't care if you have a service business, everything comes down to how good your team is. And I remember there's Andy Grove's book, High Output Management, and you know what that book is about, Neil?

What?

Confrontation. The entire book is about confrontation basically. If you're not willing to confront, it doesn't matter how good you are at, you think you are at hiring ultimately, but you're going to cap yourself out. And one thing I will say, that, you know, you've been, since I've known you in the beginning, you've always been good at confrontation. I've gotten better over the years at confrontation, but talent moats in my mind are the hardest to copy because if you have bad talent managing your marketing or your business, everything crumbles down. And you know what Warren Buffett and Charlie Munger used to say? They say, make sure your business is easy enough to run by an idiot because eventually an idiot will. I hope that doesn't happen to us, but yeah.

Hopefully not.

Yeah, maybe I'll just stay the idiot. Anyway, go ahead, continue.

Last but not least, data. In today's world, data's more fragmented. It's all over the place. Networks don't give you all the data, sadly. And the more first-party data that you own, the better off you're going to be. You saw the deal that Amazon has, right? Netflix, is it Roku? Who else is in there? Disney, I believe, is in there.

Yeah.

They're all partnering with Amazon so Amazon can run ads for them on their platforms for their streaming. Why is this important? Amazon has so much data on what people are buying. They can connect it all in and serve better ads. It monetizes better. Advertisers will pay more. It's a win-win for everyone, including the Disneys of the world.

All right. So I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital, and they work with a whole host of global companies or global organizations. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more and we'll see you on the other side. Yep. Okay, so next topic here. So Neil, I'm going to give— I'm going to read you some examples, human versus AI here, right? So this is where I want to talk about how Claude Code makes you a one-man marketing army. So I'm going to show you some examples and you tell me what you think about these examples. Okay. You having a marketing brain. And so, so here's the first email here. You can, you can jump in here too, Noah.

So wait, you want me to rate 1 to 10, like what's good or bad?

Yeah, I'm going to read you 2 emails. Are you ready? Okay, I'll be quick. Okay, so one is AI generated, the other one's human generated.

Don't tell me which one is what.

Okay, I won't. And then I'll do the same thing for you. Okay, ready? Okay, here we go, guys. And then this is the— then guys, the topic here is how Claude Code can make you a one-man marketing army. Okay, so first email here, the subject line is Salesforce's LinkedIn ads are haunted. Okay, preview of the post, the little preview, by the ghost of impressions that don't convert, quote unquote. Hey Neil, I have a confession. I've been looking at Salesforce's LinkedIn presence for the last— the past 20 minutes, not in a creepy way, in a quote unquote, wait, they're doing ABM wrong and they probably don't know it, quote unquote, way. Quick question, do you know what percent of your target accounts are actually seeing your LinkedIn ads? If the answer is impressions, that's exactly my point. Most ABM teams are paying for eyeballs that will never buy. It's like running a Super Bowl ad to sell B2B software. Expensive, feels good, doesn't work. I built something that might change how you think about this. But first, am I totally off base here? Is Salesforce crushing it on LinkedIn ABM and I'm the one missing something? Eric, say, so that's number 1, rate that one. Do you think that was human generated, AI generated? Rate it 1 through 100.

1 through 10 is easier.

Okay, 1 through 10. Yeah.

I think it was AI generated and I would rate it as a 6.

Okay.

I also think AI generated and I would put it like a 5. Okay.

So here's the second one.

Okay.

Subject line is 387 ads in 12 minutes. Not a typo. Preview: the math doesn't make sense until it does. I timed myself yesterday. It took 12 minutes and 47 seconds to create 387 personalized LinkedIn ad creatives for 387 different target accounts, each one with the prospect's company logo, their name, a relevant pain point based on their industry, ready to launch. I used to think personalization at scale, quote unquote, was marketing BS. Turns out it just needed better math. The old way, 1 designer, 387 accounts, 15 minutes per ad, 97 hours, about 2.5 weeks. The new way, 12 minutes, same quality, sometimes better. I know this sounds like I'm pitching you. I'm not yet. I'm genuinely curious if you've seen this kind of efficiency anywhere else in your ABM stack, because if you have, I want to know about it. Eric?

6.5. I would probably say this one is also AI generated and the first one may be human generated. Because assuming I can only— one of them's human, one of them's AI.

How about you?

Uh-huh.

I think it was a combo. I think it was a human with AI. AI started it and then human tweaked it.

Great. Okay.

So yeah, they're both AI-generated. They're both AI. Yeah. So Neil caught on. But my point here is I think where I'm going, and I'll share some other examples, but I think the physics of business is changing. You know, like when, if you and I work together and you told me it's going to take 2 weeks to get something like this up, I can at least get this. This took me like 5 minutes, right? And I can iterate off of it. So you said 6 initially, you said 8 on one of them, right? That's enough of a good enough starting point, which is what we've been talking about. But I think the problem is, and Steve Jobs said this, right? He's never found anyone in his career that will magically want to work hard that's never worked hard before. And what's happening with this stuff is that it's actually exposing people who aren't motivated a lot faster because again, the physics have changed, the laws, like I can get anything up I want, at least up to like a 6 or 7, right? Which is pretty good. And we actually got new copy up for the ClickFlow site and we got new copy up for the Single Grain site, right? Like this week we changed our popup as well. The popup looks a lot better. You know, we reworked ads, like all these, like there's this carrot ads plan, there's the onboarding email sequence for all these things. My point is not saying, guys, this is like a 10 out of 10 out the gate, but I do think that You're able to do a lot more now, a lot faster with a lot less stress. If you're a motivated person, it's like, it doesn't matter. Like when you and I were not making any, when my first job I was making $32,000 a year, I always wanted to work hard every day. Did I play poker in the back online? Absolutely I did. I did not expect that answer. But I worked hard, right? That's my point. That's my point.

Anyway. By the way, do you want to know why I felt they were AI generated?

Why?

Too wordy.

So the, um, that's a big problem with AI.

It doesn't get to the point. I don't know why it rambles. Almost all platforms do it.

You know what's crazy though? Finish your thought.

Um, and what we found, and this is why I gave them a 6 rating, one was 6, the second was 6.5. The first one was too storytelling. I'm not saying storytelling is bad because marketing storytelling is amazing, but In this example, Eric is a B2B company, right? He owns Carrot and he's hitting up someone who works at Salesforce. Correct me if I'm wrong. I'm assuming you hit up someone at Salesforce.

No, that was, I just inserted.

Yeah.

Okay. But hypothetically, Salesforce would be a target customer.

Okay.

Yeah.

That's another B2B company. The people Eric are hitting up, they don't want storytelling. They want stats, data, and they want you to get to the point and that's it. The reason the second one, I liked it a little bit more is he used some stats and data, but again, it was too wordy. And the angle I would've taken with their approach is I would've taken how many ads you can do, and I would've talked about how they barely do any ads. And I would've talked about the ROI by just testing in a mass quantity. And I would've said, I created some more ads for you that are personalized, et cetera, based on who we think is your target audience. Let me know if you want to schedule a call. We can actually roll this out and do more for you to grow your revenue or whatever it may be.

So that's it for today, guys. Please don't forget to rate, review, and subscribe, and we will see you tomorrow.