Why You NEED a Moat

And how startups often expand in different ways than founders think

On Saturday I shared a deep dive on the 6 sacrifices founders shouldn’t (but do) make. Join the community to get access to my library of 40+ deep dives, and a new one in your inbox each Saturday.

Also if you’re in Los Angeles or San Francisco, I’ll be hosting happy hours in both cities next week! RSVP to LA here and SF here. We already have over 50 founders RSVP’d to both and community members get a limited open bar as well.

Today at a glance:

  • Opportunity → Github for Pitch Decks

  • Framework → Strong Moat Needed

  • Tool → Yoodli

  • Trend → Figma Plugins

  • Quote → How Startups Expand

💡 Opportunity: Github for Pitch Decks

I love Docsend. Not because it’s a good product, but because it’s a product that manages to continue to be widely used despite both types of users (founders and investors) not liking it very much.

Dropbox bought it in 2021 and it’s basically been dormant since. There’s an opportunity to disrupt it (and Google Slides) with a more feature-rich prosumer app with an enjoyable UX.

Often decks are created by multiple people on a team and changes are made without a clear way to inform others on the team. I’ve seen this cause some pretty embarrassing moments during presentations.

If I were starting this I’d focused on pitch decks first since they tend to go through the most iterations.

🧠 Framework: Strong Moat Needed

A moat is your startup’s ability to maintain an advantage over your competitors, and investors love to talk about it. In my opinion, it’s one of the 13 most important things founder should get across when pitching.

Peter Thiel agrees. He says startups without a moat are companies that can create a lot of value yet still be worth very little.

In a recent essay, Packy McCormick argues that the most successful companies are the ones who desperately need moats.

His reasoning is simple: good ideas get noticed… quickly. And the best ideas need strong moats to maintain their advantage and grow fast enough to become dominant.

As a result…

Depth of moat needed = How obviously good your idea is - How hard it is to build

🛠 Tool: Yoodli

Yoodli would have saved my life earlier in my career (and it’s still useful for me today). It helps you nail presentations and pitches with its AI-powered speech coach by giving you real-time and judgement free feedback on any presentation, interview, or meeting — here’s an example.

After each meeting you’ll get a personalized report with your analytics with insights on how to sound more concise and engaging. Best part is it’s completely free.*

📈 Trend: Figma Plugins

If you build software someone on your team probably uses Figma. It’s become the de facto choice for designers.

While their acquisition by Adobe has been pending, the product’s plugin marketplace has greatly expanded — particularly due to AI tools. Here are some trending ones that use AI.

It’s easy to turn your nose up at plugins — but people did the same thing to Chrome Extensions at first and now there are multiple unicorns who started as Extensions.

Figma will need a lot more users to be big enough to support that but there are quite a few nice cash-flowing businesses to be built in this space.

💬 Quote: How Startups Expand

Do startups grow vertically (by offering new services to their existing market) or horizontally (by expanding their existing service to new markets)?

If you ask a group of early stage founders most will say they think they’ll do the latter. But it turns out that this is just a reflection of their stage rather than a well thought out strategy (even though they think it is!).

Why does this happen? Upgrade to unlock the full quote and analysis:

🔗 Houck’s Picks

  • Why top performers at tech companies like Google, DoorDash, and Uber use The Commons to level up (Link)*

  • How hyper responsiveness is a superpower for founders (Link)

  • A list of founder rules by Greg Isenberg (Link)

  • The two reasons price discipline really matters in seed investing (Link)

Upgrade for additional picks this week:

  • The biggest mistakes founders make

  • Founder guide to good cap table hygiene

  • How to write a good cold email to a VC

  • Mark Zuckerberg’s favorite counterintuitive startup advice

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