VOL. XCIV, NO. 247

MOAT TYPE BREAKDOWN

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Tuesday, December 30, 2025

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Network moat

Default OS Gateway Moat

3 companies · 3 segments

A network moat where an operating system, platform, or default setting becomes the primary gateway users and developers must pass through. Being the default creates a chokepoint over distribution, discovery, and monetization (install flows, permissions, payments, search, identity, notifications).

Domain

Network moat

Advantages

5 strengths

Disadvantages

5 tradeoffs

Coverage

3 companies · 3 segments

Advantages

  • Distribution chokehold: default placement and system integration drive massive, low-cost traffic.
  • Monetization leverage: the gateway can charge rents (take rates, placement fees, default deals).
  • Ecosystem lock-in: apps/services optimize for the platform, reinforcing user preference.
  • Data advantage: system-level visibility improves targeting, personalization, and security signals.
  • Defensive positioning: the gateway can bundle features, pre-install, or restrict competitors’ access.

Disadvantages

  • Regulatory scrutiny: chokepoints attract antitrust actions, interoperability mandates, and fee pressure.
  • Reputation and trust risk: perceived unfairness, privacy issues, or abusive policies can trigger backlash.
  • Multi-homing and substitution: users may use multiple gateways (cross-platform apps) reducing pricing power.
  • Ecosystem fragility: overly extractive policies can push developers to alternatives or reduce innovation.
  • Negative network effects: spam, low-quality apps, or security issues can degrade user trust and platform value.

Why it exists

  • Default bias: most users keep defaults and follow the path of least resistance.
  • Control of distribution: the gateway controls onboarding, permissions, and surface area (home screen, search, app store).
  • Developer dependency: developers prioritize the platform with the most users and the easiest monetization path.
  • Policy and technical leverage: platform rules (APIs, access, ranking) shape downstream economics.
  • Ecosystem compounding: more users -> more apps/services -> more user value -> more users.

Where it shows up

  • Mobile OS ecosystems (app stores, default search, default browser, in-app payments)
  • Desktop OS platforms (default browser/search, permissions, security prompts)
  • Cloud and enterprise platforms (identity gateways, API gateways, marketplaces, billing)
  • Hardware platforms with tight software distribution (consoles, smart TVs, voice assistants)
  • Messaging and notification gateways (default channels for reach and engagement)
  • Browser engines and extension ecosystems that shape web compatibility

Durability drivers

  • Strong default distribution surfaces (search, home screen, app store rankings, system prompts)
  • High switching costs for users (purchases, data, habits, ecosystem of devices and services)
  • Developer ROI superiority (large addressable base, best tools, reliable monetization)
  • Stable governance and predictable rules (avoid arbitrary policy shifts that hurt partners)
  • Technical integration depth (APIs, identity, payments, notifications, security layers)

Common red flags

  • Regulators force meaningful opening of distribution or payments, reducing chokehold economics
  • Developers shift to bypass channels at scale (web, alternative stores, direct billing)
  • User trust erodes (privacy scandals, security failures, spam) leading to engagement decline
  • Over-extractive monetization triggers ecosystem stagnation or innovation slowdown
  • A new device/platform paradigm resets defaults and breaks the distribution advantage

How to evaluate

Key questions

  • Where exactly is the chokepoint: discovery, installation, payments, identity, permissions, or notifications?
  • How strong is default bias: what share of users change defaults, and how easy is switching?
  • Can developers bypass the gateway (web apps, side-loading, alternative stores, cross-platform layers)?
  • Is the platform extracting too much rent and triggering regulatory or ecosystem pushback?
  • What is the credible disruption path: new device paradigm, regulation, or a shift in distribution channels?

Metrics & signals

  • Default retention rates (share of users staying with defaults over time)
  • Take rate trends and developer economics (complaints, churn, shifts to web/alt channels)
  • App/store ecosystem health (developer count, app quality, fraud/spam rates, revenue concentration)
  • User engagement and device ecosystem stickiness (repeat purchases, cross-device attachment)
  • Policy/regulatory indicators (investigations, rulings, mandated changes, fee caps)
  • Bypass adoption (side-loading rates, alternative stores, progressive web apps usage)
  • Share of transactions flowing through the gateway (payments volume, search share, referrals)

Examples & patterns

Patterns

  • Default search/browser placements that generate persistent traffic without paid acquisition
  • App store payment rails that collect take rates and control checkout
  • Identity and permission prompts that steer user choices toward platform-preferred options
  • Marketplace ranking and featuring that can make or break downstream businesses

Notes

  • This moat is extremely powerful but politically fragile: the stronger the chokepoint, the more likely regulation will target it.
  • The most durable gateways balance rent extraction with ecosystem growth. If partners stop making money, the moat weakens.

Examples in the moat database

Curation & Accuracy

This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).

Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.