Lenny RachitskyHost of Lenny's Podcast | Author of Lenny's Newsletter

Moats Are Discovered, Not Designed

8 Sept 2026 · 1 min

Watch on YouTube

1:01

Lenny Rachitsky and a guest discuss how competitive moats form as product development speeds up. They argue moats are usually discovered, not planned: Cursor built one by capturing reasoning traces and training proprietary models, not by designing defensibility upfront. The classic sources—network effects, scale, brand, proprietary data—still work and aren't about how hard software is to build.

Chapters

The speed at which companies and products are shipped is like 1000x-ing. How do you think about durability and moats?
Something that Jesse from Decagon said, which I love, moats are most often discovered, not designed. Great example of this is Cursor. You know, they were criticized a lot for not having a moat, but it turned out that initially being a high NPS DAU product was really good. And over time they captured all the reasoning traces. They trained their own models, the Composer 1, 2 models, and, you know, so on and so forth. We know how that story plays out. And then I think the other is that. We seem to have forgotten that none of the classic moats are based on how hard it is to make the software. You know, like we're not building self-driving cars. Most of us aren't. So it's network effects. It's scale advantages. It's brand effects, proprietary sort of data, or what was historically called a cornered resource. Every moat from 5 years ago generally is still a good moat. We just need founders that have ambition in those directions. We need more multiplayer products. We need consumer social. We need products that get dramatically better the more you use them, so on and so forth.