Momentum is the only MOAT by a16z Bryan Kim
Early-stage startups don’t need moats. They need momentum that compounds.
Last week Bryan Kim, investor at a16Z went super viral with this claim:
“$2M ARR in three months used to be impressive. Now we expect it within ten days. Right now, momentum is the only moat.”
And the internet basically lost its mind.
Everyone jumped in saying “momentum is not a moat” and treating it as if Bryan s now just hallucinating new defensibility frameworks out of thin air.
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People are missing the point.
It’s not that momentum is a moat in the permanent sense.
Momentum is the only thing that matters at early stage before any real moat actually exists.
And a lot of the people arguing online are VCs who have never actually built something from zero.
So they’re evaluating a seed stage company the same way they would evaluate a post-IPO SaaS business. Which makes no sense.
The reality: every real moat requires scale first
There are only four defensibilities that actually matter online
Economies of scale
Amazon didn’t have a moat as “Day 1 Amazon”.
They became defensible because once they had enough buying volume, they could negotiate cheaper rates, offer faster shipping, carry more inventory, etc. Scale created power. Power did not come first.Brand
Booking is top of mind when I need a hotel because they spent billions and built trust over time. A brand is not something you have at day zero. You earn it through repeated distribution and familiarity.Embedding
Workday or Oracle or SAP become impossible to rip out because they are tied into payroll, compliance, finance, reporting, integrations. That level of embedding doesn’t appear at MVP stage. You need customers, usage, integrations, sunk costs.Network effects
LinkedIn without users is just an empty profile page.
The value only shows up when enough other people are already there.
All four of these require the same precondition: lots of users, customers, usage, attention, distribution, momentum.
So if scale is the gatekeeper, the obvious question is:
How do you get to scale in the first place?
Answer: momentum.
Momentum is not the moat
It is what lets you survive long enough to build one
This is the sequence people keep ignoring:
Momentum → adoption → scale → moat
No early stage startup has a moat
They only have speed
Speed gives you users
Users give you leverage
Leverage is what later becomes a moat
The problem is VCs asking about “moat” when the company isn’t even at the stage where a moat could logically exist. You don’t “design” your moat at the beginning. You grow into it.
Amazon didn’t start with economies of scale but the more that it grew the more that it had.
Similarily, Airbnb didn’t have network effects when it launched, imagine how dumb would’ve been for a VC back then to ask for the competitive advantage back then.
What do you think?
Cheers,
Guillermo
“Momentum Is Not a Moat — But It’s What Gets You One”
1. What does Bryan Kim from a16z mean by “momentum is the only moat”?
Bryan Kim’s claim highlights that in today’s startup environment, speed and traction matter more than early defensibility. At pre-scale stages, momentum — growth in users, revenue, or attention — is what gives startups a chance to eventually develop real moats like brand, network effects, or economies of scale.
2. Is momentum really a moat for startups?
Not in the permanent sense. Momentum isn’t a true moat like network effects or brand, but it’s a precondition for creating one. Early-stage startups survive and attract capital through speed, user growth, and attention — all of which are necessary to reach the scale where defensibility becomes possible.
3. Why do some investors say “momentum is not a moat”?
Because they evaluate startups through the lens of mature companies, where sustainable moats matter. But at the seed stage, no real moat exists yet — only speed and execution. The misunderstanding comes from applying late-stage evaluation frameworks to early-stage realities.
4. What are the real startup moats according to NFX?
NFX identifies four defensibilities that matter most online:
Network effects – value grows as more users join.
Economies of scale – costs drop and power grows with volume.
Brand – trust and familiarity built through repeated exposure.
Embedding – becoming hard to replace due to integration depth.
Each of these requires scale, and momentum is what unlocks that scale.
5. How does momentum lead to a moat?
Momentum → Adoption → Scale → Moat.
It’s a sequence: startups move fast, gain users, build leverage, and then defensibility emerges. Without early momentum, no startup ever reaches the conditions where a moat can form.
6. What’s the difference between momentum and defensibility?
Momentum = short-term speed, growth, attention.
Defensibility (moat) = long-term protection from competitors.
Momentum gets you noticed and funded. Defensibility keeps you alive once everyone else notices.
7. When should a startup start thinking about its moat?
Not at Day 0. Early teams should obsess over momentum — user growth, adoption loops, and fast iteration. The moat conversation makes sense only after product-market fit and early scale appear.
8. Why do many VCs misunderstand early-stage moats?
Because they often haven’t built from zero and evaluate early startups like mature ones. They expect “competitive advantage” before any usage or data exists. But moats emerge after the startup has grown — not before.
9. What are examples of companies that built moats through momentum?
Amazon – built economies of scale after reaching massive buying volume.
Airbnb – developed network effects after scaling hosts and guests.
Booking.com – built brand trust after billions spent on marketing and repeat usage.
Each started with pure speed and distribution — the momentum that made their future moat possible.
10. So, what should early-stage founders focus on instead of moats?
Focus on momentum:
Growth loops that compound user acquisition
Retention and engagement signals
Fast feedback and iteration
Attention and narrative leverage
Moats can’t be planned in a spreadsheet — they’re the byproduct of winning momentum early.