Moat Anatomy

The record

1. 2013

   Etsy

   Held in part

   Whether to enforce handmade authenticity or allow outside manufacturers to enable network scale

   • Allow outside manufacturers — Let sellers use outside manufacturers to enable scalechose this
   • Enforce handmade authenticity — Keep authenticity as a strictly policed load-bearing wall

   Stated reasonThe network is what scale demands, and scale is what handmade purity caps

   What happened

   • 2025 Etsy marketplace GMS: declined to $10.5 billion in 2025, a 14% fall from peak
   • 2025 active buyers: grew to 86.5 million active buyers even as GMS fell
   • 2024 spam-account bans: reported about 3.5 million account bans, a ninefold jump
   Read the full analysis →
2. 2014

   Ferrari

   Held

   Whether to hold a fixed production cap or manage supply as an adjustable gap above demand

   • Fixed production cap — Build one less car than the market demands as a rigid rule
   • Managed scarcity dial — Adjust supply each period to keep demand comfortably aheadchose this

   Stated reasonDemand must always sit ahead of supply so allocation stays in Ferrari's hands, preserving exclusivity and pricing power

   What happened

   • 2024 Units shipped: 13,752 units shipped, roughly a third more than five years earlier
   • 2024 EBITDA margin: 38.3% EBITDA margin on €6,677 million of revenue
   • 2024 China shipments: Cut shipments to Mainland China/HK/Taiwan by 328 units to preserve exclusivity
   Read the full analysis →
3. 2017

   Crocs

   Held

   Whether to keep diluting into a broad footwear catalog or cut back to the single ugly Classic Clog and embrace 'ugly' as the brand

   • Cut to one hero clog — Re-center the catalog on the Classic Clog and lean into 'ugly'chose this
   • Stay a broad footwear brand — Keep hundreds of styles trying to become respectable

   Stated reasonRe-center on the one thing the company was actually known for — the Classic Clog — and turn 'ugly' from liability into brand asset

   What happened

   • 2020 full-year revenue: $1,386.0 million in 2020
   • 2021 full-year revenue: $2.3 billion in 2021
   • 2024 annual revenue and net income: record revenues of $4,102.1 million for 2024 with net income of $950.1 million and 58.8% gross margin
   Read the full analysis →
4. 2018

   Novo Nordisk

   Held in part

   Build the growth franchise on a single molecule (semaglutide/GLP-1) protected by patents rather than on the century-old insulin infrastructure and foundation-control moat

   • Grow via GLP-1 molecule — Lean growth on semaglutide protected by patentschose this
   • Rely on insulin moat — Depend on century-old scale, know-how and foundation control

   Stated reasonGLP-1 is faster and larger, carrying the bulk of the company's revenue and driving the growth

   What happened

   • 2024 GLP-1 value market share: compressed from 85.6% in Q1 2024 to 81.3% by Q4 2024
   • 2025 GLP-1 market leadership: Eli Lilly overtook Novo to hold roughly 57% of the GLP-1 market
   • 2026 core patent expiry: Semaglutide's core composition-of-matter patent expired around March–April 2026 in the U.S. and several markets
   Read the full analysis →
5. 2023

   Unity

   Reversed

   How should Unity monetize the games built on its engine — a per-install runtime fee or a seat-based subscription?

   • Per-install runtime fee — Charge developers a fee each time a game is installed.chose this
   • Seat-based subscription — Charge a fixed per-seat license regardless of game revenue.

   Stated reasonThe fee was meant to extract more from successful, high-revenue games Unity most needed to keep.

   What happened

   • 2024-09-12 runtime fee policy: Unity canceled the Runtime Fee entirely, reverting to a seat-based subscription with Unity Pro raised 8% to $2,200/seat
   • 2023-09-22 runtime fee policy: Unity partially revised the fee, removing it for Personal-tier users and grandfathering games on prior engine versions
   • 2023-10-09 leadership: John Riccitiello retired as President, CEO, Chairman and Board member effective immediately
   Read the full analysis →
6. 2024

   Ralph Lauren

   Held

   Whether to keep discounted wholesale volume or exit department stores and concentrate on full-price company-controlled channels

   • Exit discount wholesale — Leave department stores and push volume into full-price owned channelschose this
   • Keep wholesale volume — Retain department-store distribution and its discounting

   Stated reasonA discounted wholesale floor trains customers to wait for the markdown, so exiting pushes volume toward full-price channels and defends average unit retail

   What happened

   • 2026 adjusted gross margin: adjusted gross margin reached 69.9%, up 130 basis points for the full year
   • 2026 revenue growth: full-year revenue grew 15% reported
   • 2026 DTC comparable sales: DTC comparable store sales grew 13% for the full year with mid-teens AUR growth
   Read the full analysis →
7. 1891

   Coca-Cola

   Held

   Whether to protect the recipe as a patent or keep it a perpetual trade secret while building the real moat elsewhere

   • Patent the formula — Public disclosure, temporary monopoly expiring after ~two decades
   • Keep perpetual trade secret — Silence forever plus trademark and franchise-network moatchose this

   Stated reasonA patent demands public disclosure and expires; a trade secret can live forever as long as it stays quiet, and the recipe was never the real wall anyway

   What happened

   • 2023 gross profit: gross profit of $27,234 million on net operating revenues of $45,754 million
   • 2023 free cash flow: $9.7 billion of free cash flow and $11.6 billion of operating cash flow
   • 2024 brand ranking: ranked #7 among global brands
   Read the full analysis →
8. 1925

   Caterpillar

   Held

   Whether to distribute and service machines through owned channels or through independent dealers

   • Independent dealer network — Serve customers through independent, exclusive-territory dealerschose this
   • Company-owned distribution — Carry payroll, real estate and inventory on Caterpillar's own balance sheet

   Stated reasonThe independence gives Caterpillar a continent-spanning service army it doesn't have to fund, with dealers putting their own capital at risk to serve exclusive territories

   What happened

   • 2024 services revenue: record $24 billion in services revenue in 2024
   • 2024 services revenue growth: grew from $14 billion in 2016 to $22 billion in 2023 to $24 billion in 2024
   • 2025 connected assets: connected and reporting asset fleet grew past 1.6 million in 2025
   Read the full analysis →
9. 1970

   Visa

   Held

   How to structure the card network: keep it under one bank, or reincorporate it as a company co-owned by the issuing banks?

   • Bank of America control — Keep the program under one bank's ownership
   • Issuer-owned cooperative — Reincorporate as independent company owned by issuing banks collectivelychose this

   Stated reasonHe inherited a sprawl of squabbling bank licensees with no shared rules and no trust, and needed a corporate structure to coordinate them.

   What happened

   • 2024 transactions on Visa's own network: 234 billion transactions processed on its own rails in fiscal 2024
   • 2025 net revenue: $40 billion of net revenue on $17 trillion of total volume in fiscal 2025
   • 2024-09-30 litigation accrual: litigation accrual of about $1.5 billion as of September 30, 2024, with more than $3 billion in a U.S. litigation escrow
   Read the full analysis →
10. 1984

    Red Bull

    Held

    Whether to sell an existing Thai tonic to the West as a premium branded category rather than compete on formula

    • Sell meaning at premium — Reposition existing tonic as a premium Western identity brandchose this
    • Compete on formula — Fund a chemistry breakthrough or product improvement

    Stated reasonA premium price signals the drink is a dose worth paying up for, and the margin funds the spectacle that justifies the price

    CommittedUS$500,000 for a 49% stake (each co-founder invested this at the 1984 founding)

    What happened

    • 2025 cans sold in a year: 13.969 billion cans across 178 countries, up 10.2% vs 2024
    • 2022 cans sold in a year: 11.6 billion cans in 2022
    • 2023 global energy-drink market share: about 13% in 2023, the largest single brand in a fragmented field
    Read the full analysis →
11. 1997

    Diageo

    Held

    Whether to build a moat by owning the whole bar (a broad multi-brand portfolio) rather than the single best bottle

    • Own the whole bar — Assemble a broad multi-category, multi-market brand portfoliochose this
    • Bet on the best bottle — Rely on a single flagship brand like Johnnie Walker

    Stated reasonA single supplier who can fill the whole back bar wins shelf space, distributor attention and bargaining leverage no single brand could earn alone, and diversification hedges any single stumble

    Committed£250 million (paid to LVMH on resolution of its contest of the merger; the merger also required divesting Dewar's Scotch and Bombay Gin)

    What happened

    • 2025 Johnnie Walker US net sales: fell 10.6% in the US
    • 2024 organic operating profit: organic operating profit fell 4.8% and organic operating margin contracted 130 basis points
    • 2024 dividend: raised its dividend 5%
    Read the full analysis →
12. 2002

    Hershey

    Held

    Whether the Hershey Trust could sell its controlling interest to diversify, or remain locked in as the company's controller

    • Sell controlling stake — Complete the sale to diversify the endowment
    • Abandon the sale — Withdraw and retain control under court orderchose this

    Stated reasonA Pennsylvania Orphans' Court injunction, following the Attorney General's petition, prohibited the trust from entering any sale agreement

    What happened

    • 2025 voting control retained: The trust holds over 80 percent of the total shareholder vote via Class B shares
    • 2016-06 takeover bid rejected: Mondelez's ~$23 billion, $107/share bid was unanimously rejected as no basis for further discussion
    • 2024-12 takeover bid rejected: Hershey Trust rejected Mondelez's ~$45 billion preliminary bid as too low; Mondelez announced a $9 billion buyback instead
    Read the full analysis →