Where's the moat?

• A 75-minute live-debate class on telling a durable advantage from one that only *feels* durable.
• *Presenter note:* say the honest line — this is teaching material, not a certification or credit.

The situation: FitLoop

• Composite app: book single fitness classes at independent studios, pay-per-class.
• Best year ever: 40 studios, 25,000 members, 70% growth.
• Then PulsePass (national-chain-backed) enters: free pass, lower price, copies the best feature in
• two weeks.
• *Presenter note:* poll the room — "race PulsePass on features, yes or no?" Mark the split.

What is a moat?

• A *structural* reason a company keeps earning while rivals can't take it.
• Not a moat: a smart team, a nice product, a good quarter — all copyable.
• The test: what *structurally* stops a rival?

The five real sources

• Network effect · switching cost · cost advantage · intangible/brand · efficient scale.
• If you can't name which one a company has, it probably has none.

The three mirages

• A hot feature (loud now, copied later) · first-mover with no lock-in · growth alone.
• All real strengths; none durable by itself.

Your call

• Label FitLoop's six facts: moat or mirage. Then pick where the next dollar goes: (a) features
• (b) more studios (c) deeper lock-in (d) match the free pass.
• *Presenter note:* every table commits to one letter before the debate.

The defensible read

• Durable: the two-sided network + switching costs (history, 30% of studio bookings).
• Mirages: the streak feature, 70% growth, first-mover. No cost advantage; efficient scale just
• broke when PulsePass entered.

What each option costs

• (a) defends the *copyable* edge, invites a war a funded chain wins.
• (d) burns cash for nothing structural.
• (b)/(c) build the wall PulsePass can't copy — slower, quieter, durable.
• *Presenter note:* land the takeaway — a moat is what a funded rival still can't take next year.