The best advice I ever got about the flywheel moat: the only defensible strategy for came from a founder who'd failed at it three times.
In an era where AI models are commodities, the only lasting moat is a flywheel. I'll break down how to design and build a self-reinforcing loop where your product, data, and users create an unstoppable momentum.
The Counterintuitive Truth
Here's what surprised me most about the flywheel moat: the only defensible strategy for: the best practitioners do less, not more.
When I was building MovieLaLa, we tried to do everything at once. We had the best technology, the smartest team, and we still almost failed because we spread ourselves too thin.
The lesson I took from that experience, and from watching hundreds of other companies, is that the best solutions are often the simplest ones. It sounds simple. It's incredibly hard to execute.
The Reality Nobody Talks About
Most people approach the flywheel moat: the only defensible strategy for with assumptions that made sense five years ago. The world has moved on. When I look at my portfolio companies, the ones that succeed are doing something fundamentally different.
The first thing to understand is that your team matters more than your technology. I've seen this play out across dozens of companies. The pattern is unmistakable.
At RemoteTeam, we learned this the hard way. We spent months going down the wrong path before realizing that the market doesn't care about your roadmap. Once we made the switch, everything changed.
Lessons From the Trenches
I want to share a few specific lessons I've picked up over the years. These aren't theoretical. They come from real companies, real failures, and real successes.
Lesson 1: The best time to start thinking about the flywheel moat: the only defensible strategy for was yesterday. The second best time is now. Don't wait until you have the perfect plan.
Lesson 2: Hire for attitude, train for skill. The best the flywheel moat: the only defensible strategy for practitioners I've met weren't the most technically gifted. They were the most curious and persistent.
Lesson 3: Your competitors are probably getting this wrong too. That's your opportunity. While everyone else is following the same playbook, you can zig when they zag.
This connects to broader themes around AI talent wars, AI due diligence, AI competitive moats, AI pitch decks that I've been thinking about a lot lately.
What's Next
The world of the flywheel moat: the only defensible strategy for is moving fast. What worked last year might not work next year. That's both the challenge and the opportunity.
My advice: stay curious, stay humble, and stay close to the people who are actually doing the work. Read less thought leadership and do more experiments. Talk to fewer consultants and more practitioners.
And if you're a founder building in this space, remember that the best time to get the flywheel moat: the only defensible strategy for right is before you need to. Don't wait for a crisis to force your hand.
I'll keep sharing what I learn. This stuff matters too much to keep to myself.
Frequently Asked Questions
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.