Personal Competitive Moats

Building personal competitive moats is one of the best ways of ensuring continuous career success and stable income streams. What are they and how can you build them?

Nowadays, the term moat is mostly used in the business context and describes:

‘a business ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms.’

A ‘personal’ moat is exactly the same but for an individual, like yourself. I added the word ‘competitive’ because it sounds better and to emphasize that moats are a tool to differentiate from other people.

Personal competitive moats refer to advantages that can continuously defend or improve your career capital. As a caveat, moats work a bit differently for individuals than for companies. This is because it is more difficult to scale the work of an individual compared to the work of a company. There are not many industries in which one person can produce enough output to sufficiently cover all the demand. Companies, however, could potentially build monopolies or oligopolies since they can scale their operations much more easily. A single human cannot do all the work within an industry. Therefore, being differentiated and having competitive advantages can be important for the career success of an individual, but it is less important than it is for companies.

I am trying to keep this article practical so I will refrain from focusing more time on definitions and theories.1 Below you can find strategies that you can use to build long term advantages for yourself.

Gain marketable skills

Having a marketable skill is probably still the best career accelerant that you can have. A marketable skill in this context describes a skill that can be used to create direct or indirect value for other humans. The value of the specific skills is mostly influenced by scarcity, the relative level of skill, how much value it can provide to other people and how many people can be impacted by it.

Highly valuable skills are scarce. Acquiring relevant skills is often difficult and tedious, otherwise many people could do it easily and it would be less valuable. For example, being able to program or to perform surgery are skills that are fairly rare in contrast to how much demand there is and how much people are willing to pay for it.

Only gaining a skill itself is helpful but not directly defensible since other people can theoretically also learn the skill. This is where the relative level of skill comes into play. The higher the gap between you and other people is, the higher is the value of your skill. The best person in the world in almost any subject can find a way of making a good living out of it. A great example is being able to drive a car. Many can drive cars good enough to become an Uber-driver which is why it has a comparatively low financial value. However, if you are good enough at driving cars to become a world-class race car driver and get a spot in Formula 1, your earnings potential skyrockets. With car driving skills the breadth of high earners at the top is very slim. There are not too many positions that pay high sums for car-driving skills. This is very different in computer programming where the breadth of available high-salary positions is much higher. The 50000th best car driver’s earnings potential is fairly mediocre whereas the 50000th programmer in a hypothetical world-wide programmer ranking would still be heavily sought after and earn a lot of money since the market for good programmers is huge.

Another profitable strategy that differs from choosing skills for a popular massive market is choosing a market that is disliked by most people. It can be very profitable for you to work jobs or found companies in “unsexy” industries. As an example from the startup world, there is a myriad of founders who want to build the next social app or B2B SaaS software for startups but comparatively few founders who work in B2G (Business to Government), manufacturing or defense.

In conclusion, acquiring a skill that is both scarce and has sufficient demand is a valuable step towards creating a moat for yourself. The moat is bigger the better you are at it compared to others and the more difficult it is to acquire the skill.

Be ‘the one person for X’

Your skills can be inhuman, if no one knows about it, you will not be able to capitalize on it. Being known for having a specific skill or deep knowledge about a topic can be very useful. You buy yourself rent-free space in the minds of other people. If they see an opportunity that is a fit for the specific image you are projecting to the outside world, their mind will automatically jump to you. So they are helping you to watch out for opportunities. You cannot see everything on your own, you have a way higher likelihood of finding great opportunities if other people are looking for them as well, even when it happens passively. I do have a couple of examples from my own life and from other people who are excelling at it. In my circle of friends in the startup world, it is well-known that I participated in YC and that I am doing Mock interviews for YC. So whenever my friends know anyone who gets a YC interview, they are forwarding them to me for a practice session. That is not really resulting in a moat since it is a hobby but it provides me with a steady stream of great founders to talk to. If I ever create a VC fund that would be a great position to be in. Another example is that I have an acquaintance who is a therapist specializing in young professionals in high pressure industries. Whenever someone asks me for a therapist recommendation that fits his focus, I immediately think of him despite me not even knowing him that well. Similar things could happen to an investor who is known for investing in a specific industry or for someone who is recognized as a great Chief Product Officer.

Being ‘the person for x’ does not necessarily mean that you are the greatest expert in the specific field. It just means that people think of you when they think about the topic. Often that implies that you know it well but it does not have to be true. I would argue that being recognized as an expert supported by external validation is a separate point and can be seen as a separate moat and will be discussed below. Importantly, being the person for x leads to you improving in the field faster than other people in the field since you will have more opportunities coming your way.

Build signaling through external validation

Whereas you might argue that pure skill should be the deciding factor to be picked for an opportunity, the world sadly is not as efficient. Especially in areas where skill is very difficult to measure appearance is often very important. One easy way to improve signaling is by receiving external validation. This can be through positive media coverage, awards, membership in a prestigious group in your industry, or public endorsements by well-known figures in your industry. If you work in Finance and the Wall Street Journal interviews you for your opinion, you can bet that this increases your market value. If you are a founder and get funded by Y Combinator, VCs will be more likely to be interested in taking a meeting, all other things held constant.

Funnily enough, university degrees still count for this as well as having worked at specific companies that you have worked at. You would be able to put an average person into a job at Google, Goldman Sachs, or McKinsey for 3 years and have them do nothing but browse the internet the whole day. They would have no struggle finding a new job even without the relevant skills just because many people would be blinded by the names. The same is true for studying at Stanford or Harvard. Why is that true? Because the average person who has worked at these companies or studies at these universities is hard-working and smart. Companies or business partners outsource part of their own vetting process to these organizations. Since it is comparatively difficult to get into Stanford or Google, they assume that the people who spend time there have a certain minimum level of quality which is often true but definitely not always.

Amass enough money

This might be a fairly obvious point but it would be careless not to mention it. Financial capital opens innumerable opportunities that are impossible to access without capital. Having a financial safety net equals freedom. You can quit your job or end a project at any time without any repercussions and can focus on a different project if you would like to. Having the financial means to invest in other companies, either directly in early-stage ones or on the public market, enables you to have other people work for you without lifting an additional finger. This is a major reason why the second million is much easier than the first one.

Gain access to a scarce resources

There are government-protected moats for some occupations. The harder it is to get the license, the more valuable it usually is. A taxi-license in New York has been a very expensive asset over the last decades until ride-sharing services destroyed the market. Notaries have a very easy job once they have gotten their notary license since they enjoy state-granted monopolies in their specific areas in many countries. So by definition, the competition is limited and becoming a notary is a fairly defensible job to work in.

A different example is being an apprentice to one of the best people in your field. Gaining access to their knowledge and network is difficult to copy for others and provides you with a great foundation for the rest of your career.

Create content

Creating content can be a remarkably effective moat for you. The main reason for that is that content is a form of one-to-many communication. You have to produce the content once, but it can be viewed by thousands and sometimes millions of people all over the world and for years. Potential clients can find your blog post months after you have written it and you literally did not have to do anything for it. Another advantage of content is that it usually transmits your very own voice and is therefore not easily copyable by other folks in your industry. Publishing content about topics in your field of expertise can help you a) structure your own thoughts more effectively, b) find a curated audience who is interested in the field you are examining, c) be great signaling for people who want to assess your expertise in an area. Lastly, content is often reinforcing your position in the internet hierarchy. Having frequently-shared, highly read articles on your website improves your search ranking which further improves the likelihood that other people will read your content. Similarly, YouTube videos with many views have a higher likelihood of being watched than videos with fewer views. Producing content that is publicly accessible is the closest version of cloning yourself you can get nowadays. You should probably use it.

Build a unique network

Knowing the right people and them having a favorable impression of you will do wonders for you. Building a network requires time and effort. It is not easily copyable by anyone else. There are very distinct ways of building networks and there are competing views on what offers the highest value. Is it more valuable to know a lot of people or to know the right people very well? Most of that is context dependent. If you are an aspiring actor and Leonardo DiCaprio is your godfather you are probably in a better position than someone who knows hundreds of less successful people in Hollywood.

There is some value in knowing many people in the same niche but there is also great value in being able to connect people from different niches, especially if these two groups have some natural synergies. For example, I know a vast number of promising early-stage founders and many early-stage investors. Every week, I introduce founders to investors who write their first checks or fill in one of their early rounds which creates value for both sides.

Choose the steep curve

There is the famous saying of ‘failing upwards’. Choosing difficult projects often leads to better mid-term career outcomes than choosing easy projects even if the difficult ones fail and the easy ones succeed. This is because steep curves force you to learn more quickly, you meet more interesting people and there is a higher likelihood of being catapulted into better positions.

Build systems that foster success

Results are often influenced by external variables and cannot be fully controlled by you. However, you can almost fully control the systems that you build for your own productivity. Having strong systems for productive work enables you to always fall back on them if you experience setbacks. They enable you to bounce back more quickly and also to further accelerate your growth in times of progress. For example, having a streamlined way of managing external communications like email or having a proven system of getting into the flow to do deep work will support you in most career projects that you are pursuing. You will save time and mental capacity which can be used for other endeavors.
Spending time on getting your systems right first is very valuable time and you will be very glad that you committed the resources since you can often find value in that quickly.

Closing thoughts

To close it off, there are many ways of building your own competitive moats. You cannot focus on all of them at once. Importantly, none of these moats are required to have a successful career. You can prosper without each of them, however they all do make it easier for you in their own way.


Shoutout to Erik Torenberg who influenced my early thoughts on personal moats a couple of years ago. He also writes about it, for example here.

I also love this short article from Scott Adams about combining multiple skills to ensure gaining a competitive advantage.

1) Some of the concepts in the text could be considered competitive advantages rather than moats if we fully stick to the definitions in the business literature. To simplify the matter I am sticking to one term throughout the text.