There are a handful of companies that have an unbeatable advantage - the fiduciary moat. A fiduciary advisor, legally bound to put your financial interests ahead of his. Apple’s business model relies almost entirely on revenue earned directly from consumers. Even when you are buying third-party apps, you are buying them from Apple and ensuring they are safe, secure, and work as advertised. Amazon, Jeff Bezos is single-mindedly focused on delivering value to the consumer. They too make their revenue and profits by selling directly to the individual user.
In B2B, companies that sell primarily to the CIO and procurement compete with the new age of SaaS players that are often selling direct to the line of business or even the individual user. As Apple enters markets like health and finance, they come in with the benefit of consumer’s trust. They serve your needs directly without making money from businesses not aligned with end-users.
The massive shift to SaaS can be viewed from the technology lens of multitenancy and serverless but at its core is the ability for the end user or line of business to directly buy the apps they need. Netflix is so powerful because every person in the company is focused on delivering entertainment to subscribers, there are no advertisers and no cable company middlemen dictating what they think is good for the consumer. An ad-free business not only great TV but also aligns incentives in unique ways that create a moat that’s hard to beat.
Airbnb: makes money when both renter and host are happy over the long term, unlike Expedia or Priceline which serve some very large customers with a somewhat transactional relationship with consumers. Wealthfront has a transparent fee structure without any hidden fees serving younger generation what Vanguard was last - one of the few financial services companies that is honest and aligned with users.
The closed content ecosystem of Apple and Amazon Alexa are examples of companies maximizing their own self-interest even when business relies on advertising or CIO. But, building a culture of doing right by end-users helps to build lifetime moats that are hard to beat. The best startups I have invested in or advised like ProsperWorks, Workato, Algolia are doing just that.
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