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Build a rigorous, evidence-based assessment of a company's competitive moat — the structural advantage that allows it to earn above-market returns sustainably. Use this skill whenever Ian asks to "assess the moat," "analyze competitive advantage," "how defensible is this business," "what protects this company," "evaluate the moat," "is this moat real," "rate the competitive position," or "what makes this business hard to displace." Also triggers for: "switching cost analysis," "network effect analysis," "competitive defensibility," "moat durability," "barrier to entry." This skill builds the affirmative case for a moat with the specific evidence standard required to survive adversarial IC scrutiny. It is distinct from: - Competitor profiling (market-research Level 2 — describes what competitors do) - Moat attack vectors (red-team-investment-attacks.md — challenges moat claims) - Moat type taxonomy (mckinsey-consultant Dimension 4 — lists moat categories) This skill owns the methodology for PROVING a moat is real, measuring its strength, assessing its durability, and producing an IC-ready moat verdict.
How this skill is triggered — by the user, by Claude, or both
Slash command
/deal-research:competitive-moat-assessmentThe summary Claude sees in its skill listing — used to decide when to auto-load this skill
You are building an evidence-based case for or against a competitive moat. Read this
You are building an evidence-based case for or against a competitive moat. Read this entire file before beginning.
A moat assessment is not a description of what a company does well. It is a structured
proof that a specific structural advantage exists, is measurable, produces above-market
returns, and will persist for the investment horizon. The burden of proof is high —
every moat claim must survive the adversarial standard in red-team-investment-attacks.md.
Most investment documents assert a moat without proving one. The most common failures:
Narrative moats: "Strong switching costs" stated without quantifying what switching actually costs a customer in dollars, time, or organizational disruption.
Feature moats: "Best product in the market" — product advantages are not moats. They are temporary leads that erode as competitors invest. A moat is a structural feature of the business model, not a feature of the product.
Scale moats without mechanism: "Benefits from scale" stated without identifying the specific cost category that declines non-linearly with volume.
Network effects without feedback loops: "Network effects" claimed for a product where users don't interact — where adding user N+1 does not increase value for user N.
This skill exists to prevent these failures by requiring evidence at each step.
Before assessing strength or durability, identify the moat type. A company can have multiple moats, but each must be assessed independently. Mixed or overlapping claims produce weak analysis.
Type 1 — Network Effects Definition: The value of the product to each user increases as more users join. The feedback loop must be direct and measurable — not just "more users = more revenue."
Sub-types that matter in practice:
Type 2 — Switching Costs Definition: A customer incurs meaningful cost — financial, operational, or psychological — when moving from this product to a competitor.
Sub-types that matter:
Type 3 — Scale Economies Definition: Unit costs decline as volume increases, creating a structural cost advantage for the incumbent that entrants cannot replicate without first achieving scale.
Sub-types:
Type 4 — Proprietary Assets (IP / Data / Brand) Definition: The company owns something valuable that competitors cannot replicate regardless of how much capital they deploy.
Sub-types:
For each claimed moat type, apply the existence test. A moat claim that fails the existence test must be downgraded to a feature advantage or removed.
Network Effects — Existence Test:
Switching Costs — Existence Test:
Scale Economies — Existence Test:
Proprietary Assets — Existence Test:
After existence is established, rate moat strength on a 1–5 scale per dimension.
| Rating | Label | Definition |
|---|---|---|
| 5 | Dominant | Moat prevents meaningful competitive displacement for 5+ years under any realistic scenario |
| 4 | Strong | Moat requires sustained investment and favorable conditions to erode; displacement is costly and slow |
| 3 | Moderate | Moat provides 2–3 years of protection; a well-capitalized competitor could erode it |
| 2 | Weak | Moat provides 12–18 months of protection; a focused competitor with capital could displace |
| 1 | Nominal | Claim is directionally correct but structural advantage is insufficient to prevent displacement |
For each moat type, specific evidence is required to support the rating:
Network Effects Strength:
Switching Cost Strength:
Scale Economy Strength:
Proprietary Asset Strength:
A moat that exists today but will not exist at exit destroys the return thesis. This step assesses moat durability specifically for the investment hold period (typically 4–6 years).
For each moat, identify the specific threat vector most likely to erode it during the hold period:
Network Effect Durability Threats:
Switching Cost Durability Threats:
Scale Economy Durability Threats:
Proprietary Asset Durability Threats:
| Rating | Label | Definition |
|---|---|---|
| High | Durable | Moat is structurally self-reinforcing — it compounds over the hold period |
| Medium | Stable | Moat holds for the hold period but requires active investment to maintain |
| Low | Eroding | Moat shows measurable erosion signals — monitor closely |
| Critical | At Risk | Moat is likely to be materially weaker at exit than entry |
After completing Steps 1–4, synthesize into a single moat verdict for IC use.
MOAT VERDICT: [Company Name]
Primary moat type: [Type 1–4]
Secondary moat (if applicable): [Type or None]
Existence: Established / Partially established / Not established
Strength: [1–5] — [Label]
Durability: High / Medium / Low / Critical
Overall verdict: [STRONG / MODERATE / WEAK / NOMINAL]
One-sentence summary:
"[Company] benefits from [specific moat type] driven by [specific mechanism],
evidenced by [specific metric], which [is / is not] self-reinforcing and
[will / is unlikely to] persist through the investment horizon."
Primary threat to moat:
[The single most likely erosion scenario, specific and named]
What would change the verdict:
[The specific observation or data point that, if true, would upgrade or
downgrade the rating by one level]
STRONG: Moat exists (established), strength ≥4, durability High or Medium. Returns above hurdle even in competitive scenarios.
MODERATE: Moat exists (established or partially), strength 3, durability Medium. Returns adequate in base case; competitive erosion is the primary downside risk.
WEAK: Moat partially established or strength ≤2. Returns require above-base-rate execution; competitive displacement is a realistic scenario in the hold period.
NOMINAL: Moat claim not established or durability Critical. No structural protection. Returns depend on continued product and execution excellence — treat as a feature advantage, not a moat.
The moat verdict produced in Step 5 feeds directly into:
The moat assessment integrates into the competitive landscape section at Level 2 (Competitor Profile Anatomy, Element 3 — Sustainable Advantage). Apply Steps 1–3 for each named competitor. Step 4 (durability) is assessed for the subject company only, not for all competitors.
In deep dive mode — produce the market-wide moat scorecard:
When market-research is running in deep dive mode, competitive-moat-assessment produces a scored matrix across all named companies in the market, not just the subject company. This is Section 10 of the deep dive document structure.
Moat scorecard format:
Score each company 1–5 on each dimension. Total out of 25.
| Company | Data network | Switching cost | Platform lock-in | Scale economies | IP/Brand | Total | Verdict |
|---|---|---|---|---|---|---|---|
| [Name] | [1–5] | [1–5] | [1–5] | [1–5] | [1–5] | [/25] | Structural / Conditional / Transient |
Scoring discipline:
After completing this assessment, load red-team-investment-attacks.md Section
"Attack Lens 1: Company Quality — Competitive Moat Attacks" and apply every attack
vector to the verdict produced in Step 5. A moat verdict that does not survive
adversarial review must be downgraded before it appears in an IC memo.
Read: /mnt/skills/user/red-team/references/red-team-investment-attacks.md
→ Section: Competitive Moat Attacks
All moat assessments are subject to writing-style claim discipline:
Every moat claim must be labeled: [F] fact / [E] estimate / [H] hypothesis
Inductive chain requirement: Any claim that the moat produces a specific outcome (e.g., "switching costs drive NRR above 110%") must have a complete inductive chain: outcome variable → proximate driver → gating constraint → observable condition.
Absolute assertion prohibition: Terms like "strong," "significant," "world-class," "best-in-class" applied to moat claims fail the absolute assertion test. Replace with the specific metric, mechanism, or comparison.
Exclusivity terms: "Only," "solely," "exclusively" applied to competitive advantages require that alternative mechanisms have been explicitly considered and ruled out.
Read: /mnt/skills/user/writing-style/SKILL.md → Steps 1–3
A moat assessment is IC-ready when all items pass:
Existence
Strength
Durability
Verdict
Claim integrity
npx claudepluginhub ian-lawrence423/claude-skills --plugin deal-researchGuides creation, editing, and verification of skills for AI coding agents using test-driven development with subagent scenarios. Use when authoring or debugging skills.