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    Auren Hoffman Questions Shallower Tech Moats

    Entrepreneur and investor shares thoughts on AI increasing customer power over tech providers.

    AH
    1 Source, 26d ago, first seen 26d ago

    TLDR

    Auren Hoffman, founder of LiveRamp and SafeGraph plus CEO of NQB8, posted on social media about technology company moats. He described how firms once built deep barriers that raised switching costs for customers. Hoffman states that artificial intelligence now increases customer power and makes those barriers shallower. He asks what tech companies should do in response. Hoffman also serves as a general partner at Flex Capital and hosts the Summation podcast. The statements come from one public post by the entrepreneur and contain no replies or further details from other parties.

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    1 Source, first seen 26d ago

    Combined views

    2.3K

    1 Source, first seen 26d ago

    22 likes
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    1 Source

    @aurenWhat do we do if moats are getting shallower? How should tech companies respond? moats are getting shallower. Used to be that you would build software and you build these really deep moats around it, make it very hard for customers to switch. but AI is increasing the power of the customer, making customers much more powerful because they can easily switch from one to the other. so how should you react if you're a tech company? If you think of the moats analogy, there are two types of ways of aligning your army: - You could be aligning your army to DEFEND, in which case you're building moats, trenches, and all these other types of things because you want to defend an onslaught. - You could build an army to ATTACK, in which case you don't have to worry too much about your defenses because you're much more on offense. In a world that is going to be much more agentic, much more about disposable software, you really want to be aligning your organization to be attacking way more than being defensive. Your army should look a lot more like Genghis Khan than like some sort of medieval castle with big high walls, moats, and archers (other types of things to stop the invaders). You want to be the invader, and instead of building the moats to stop the invaders be the attacker and you do not need to worry about moats. attacking is about innovation. offense is fun. defending is usually about stopping innovation. "moats" usually mean things like regulatory capture and other things that signal something stays with the past. attacking is about the future. be the attacker. and burn down other people's moats. and if you are really on offense, you don't need to worry about your moats until much later (when you really need to hold ground).

    1 Source

    @aurenWhat do we do if moats are getting shallower? How should tech companies respond? moats are getting shallower. Used to be that you would build software and you build these really deep moats around it, make it very hard for customers to switch. but AI is increasing the power of the customer, making customers much more powerful because they can easily switch from one to the other. so how should you react if you're a tech company? If you think of the moats analogy, there are two types of ways of aligning your army: - You could be aligning your army to DEFEND, in which case you're building moats, trenches, and all these other types of things because you want to defend an onslaught. - You could build an army to ATTACK, in which case you don't have to worry too much about your defenses because you're much more on offense. In a world that is going to be much more agentic, much more about disposable software, you really want to be aligning your organization to be attacking way more than being defensive. Your army should look a lot more like Genghis Khan than like some sort of medieval castle with big high walls, moats, and archers (other types of things to stop the invaders). You want to be the invader, and instead of building the moats to stop the invaders be the attacker and you do not need to worry about moats. attacking is about innovation. offense is fun. defending is usually about stopping innovation. "moats" usually mean things like regulatory capture and other things that signal something stays with the past. attacking is about the future. be the attacker. and burn down other people's moats. and if you are really on offense, you don't need to worry about your moats until much later (when you really need to hold ground).