Software Is Not a Moat
Any feature you ship can be cloned; build ecosystems, platforms, and hardware that can't be copied.
- Difficulty
- Expert
- Time to result
- ~ongoing to results
- Steps
- 3
- Confidence
- 90%
A durability framework for deciding where to invest so competitors can't simply copy you. It rests on the premise that software features — even patented ones — are trivially cloned, so lasting advantage comes from assets that resist replication: multi-sided ecosystems, developer/creator platforms, and vertically integrated hardware. Use it when a bigger competitor keeps copying your best ideas.
Origin
Spiegel says Snap learned 15 years ago — a lesson he notes 'everyone is discovering today with AI' — that any feature they created was instantly cloned. That drove a deliberate pivot toward ecosystems, platforms, and hardware as the real moats.
Core principles
- 01Software features and even patents are easy to iterate on and copy; they don't hold.
- 02Ecosystems of relationships (creators, developers, community) are extremely hard to replicate.
- 03Network effects help but are not sufficient against software cloning.
- 04Vertically integrated hardware is one of the hardest things for a competitor to copy.
How to run it
- 1
Accept that your feature will be copied
Assume any successful software feature will be replicated by a larger competitor. Design strategy around that reality instead of relying on secrecy or patents.
Pro tip Being copied is a signal you built something people want — 'it certainly beats the alternative.'
- 2
Build a platform around the feature
Convert single features into ecosystems that require relationships between creators, developers, and the community. A rival can copy a lens tool; they can't copy millions of lenses built by your developer community.
- 3
Invest in the genuinely hard-to-copy layer
Move toward assets with high replication cost — a vertically integrated hardware stack, proprietary platforms — that a competitor cannot rip off with a software update.
Watch out These moats take years and heavy investment; expect to sacrifice near-term profitability while building them.
In the wild
Rather than treat AR as a feature, Snap built a platform where developers created millions of lenses, making the ecosystem — not any single lens — the moat.
→ Over 8 billion AR lens photos posted per day; an ecosystem far harder to copy than any feature.
Spiegel pushed into a fully vertically integrated AR hardware stack precisely because it is 'really, really challenging' to copy, unlike software.
→ 12 years of investment culminating in a consumer Specs launch.
Common mistakes
Relying on patents to protect software
Spiegel notes that despite 'a ton of patents,' competitors easily copy or iterate on the underlying ideas.
Treating network effects as a complete moat
Network effects are 'an important piece of the puzzle' but not enough on their own against software cloning.
Is it for you?
Best for
Founders whose best features are being copied by larger, better-distributed competitors.
Not ideal for
Early startups still searching for product-market fit, where premature moat-building wastes scarce resources.
From the transcript
“15 years ago we essentially learned that software is not a moat”
“it's very hard uh to to copy or to to rep a data of a full ecosystem or a platform”
“it's really really challenging um you know, to copy our our fully vertically integrated stack”
From the episode
Snapchat CEO: Why distribution has become the most important moat
Evan Spiegel