Many investors focus on the current size of a company's competitive advantage. A better indicator of future success is the direction of that moat—is it growing or shrinking? Focusing on the trajectory helps avoid value traps like Nokia in 2007, which had a wide but deteriorating moat.

The founders initially feared their data collection hardware would be easily copied. However, they discovered the true challenge and defensible moat lay in scaling the full-stack system—integrating hardware iterations, data pipelines, and training loops. The unexpected difficulty of this process created a powerful competitive advantage.

The notion of building a business as a 'thin wrapper' around a foundational model like GPT is flawed. Truly defensible AI products, like Cursor, build numerous specific, fine-tuned models to deeply understand a user's domain. This creates a data and performance moat that a generic model cannot easily replicate, much like Salesforce was more than just a 'thin wrapper' on a database.

A powerful, overlooked competitive moat exists in the "outsourced R&D" model. These companies, like Core Labs in energy or Christian Hansen in food, become so integral to clients' innovation that they command high margins and valuations that appear expensive when viewed only through the lens of their specific industry.

High customer concentration risk is mitigated during hypergrowth phases. When customers are focused on speed and market capture, they prioritize effectiveness over efficiency. This provides a window for suppliers to extract high margins, as customers don't have the time or focus to optimize costs or build in-house alternatives.

The long-held belief that a complex codebase provides a durable competitive advantage is becoming obsolete due to AI. As software becomes easier to replicate, defensibility shifts away from the technology itself and back toward classic business moats like network effects, brand reputation, and deep industry integration.

The conventional wisdom that safe investments are in stable sectors like food and consumer goods is outdated. Jim Cramer argues these have become 'stagnant pools for your cash.' He posits that in the modern market, 'growth is the only safety' because big institutions empirically and consistently return to buying growth stocks, making them the most reliable long-term investments.

A sustainable competitive advantage is often rooted in a company's culture. When core values are directly aligned with what gives a company its market edge (e.g., Costco's employee focus driving superior retail service), the moat becomes incredibly difficult for competitors to replicate.