7 Powers — Competitive Moat Analysis
You are applying Hamilton Helmer's 7 Powers framework to evaluate which structural competitive advantages the user's product has, which can be built, and which are absent.
7 Powers are structural — they persist because of an inherent dynamic, not just because of good execution. Good execution is necessary but not sufficient for durable advantage.
Step 1 — Load Context
Read memory/user-profile.md for product stage, business model, and current bets. Read context/company/competitors.md if it exists.
Step 2 — The 7 Powers Evaluated
For each power, assess: Strong / Emerging / Opportunity to Build / Not Applicable
1. Scale Economies Definition: Cost per unit falls as volume increases, making it hard for smaller competitors to compete on price. Questions to evaluate: Does cost per user, per transaction, or per unit decrease materially as we scale? Do we have fixed costs that become advantageous at scale? Typical products: Cloud infrastructure, marketplaces with large supplier bases, media with high fixed production costs. Build path: Focus on growing volume in a specific segment to achieve cost advantages before expanding.
2. Network Effects Definition: The product becomes more valuable as more users join. Types:
- Direct: Each user directly adds value for other users (social networks, communication tools)
- Indirect: More users on one side attract more on the other (marketplaces, platforms)
- Data: More users generate more data that improves the product for everyone Questions to evaluate: Does adding user 1,000 make the experience materially better for user 500? What specific mechanism creates the network value? Build path: Find the minimum viable network — the smallest number of users at which the network effect becomes self-reinforcing.
3. Switching Costs Definition: Users incur significant cost (time, money, risk, learning) when they try to leave. Types: Data lock-in, integration lock-in, workflow embedment, team training investment, organizational habit Questions to evaluate: What would a user lose if they switched to a competitor tomorrow? How long would it take to replicate their current setup elsewhere? Build path: Increase integration surface, deepen workflow embedment, make data portable enough to reduce anxiety but sticky enough to create switching cost.
4. Branding Definition: Trust and perception built over time that commands a price premium competitors can't replicate. Questions to evaluate: Do users choose us over technically equivalent alternatives because of the name? Do we command a price premium in a category with cheaper alternatives? Build path: Consistent, distinctive communication; earned trust through quality and transparency; category definition leadership.
5. Cornered Resource Definition: Exclusive or preferential access to a critical resource that competitors can't easily obtain. Types: Proprietary data, exclusive partnerships, unique talent, patents, regulatory licenses Questions to evaluate: Do we have data, partnerships, or talent that gives us a capability others can't easily replicate? Build path: Structure agreements and data strategies to maximize exclusivity; hire the category's defining talent before competitors do.
6. Counter-Positioning Definition: A business model that incumbents can't copy without hurting their existing business. Questions to evaluate: Would it damage an incumbent's business if they adopted our business model? What is their incentive NOT to compete with us in the way we compete? Build path: Design the business model deliberately to exploit an incumbent's constraint or conflict of interest.
7. Process Power Definition: Accumulated organizational know-how and processes that create compounding advantages. Questions to evaluate: Do we have processes or capabilities that have compounded over time and would take competitors years to replicate even with resources? Build path: Document and systematize the processes that produce quality; make them teachable and scalable; measure and improve them deliberately.
Step 3 — Current Power Assessment
For the user's product, assess each power with a brief rationale:
| Power | Status | Evidence | Build Path |
|---|---|---|---|
| Scale Economies | [Strong/Emerging/Opportunity/N/A] | [Why] | [How] |
| Network Effects | [Strong/Emerging/Opportunity/N/A] | [Why] | [How] |
| Switching Costs | [Strong/Emerging/Opportunity/N/A] | [Why] | [How] |
| Branding | [Strong/Emerging/Opportunity/N/A] | [Why] | [How] |
| Cornered Resource | [Strong/Emerging/Opportunity/N/A] | [Why] | [How] |
| Counter-Positioning | [Strong/Emerging/Opportunity/N/A] | [Why] | [How] |
| Process Power | [Strong/Emerging/Opportunity/N/A] | [Why] | [How] |
Step 4 — Strategic Recommendations
- Which 1–2 powers should the user focus on building first?
- Which current roadmap items build a power? Which don't?
- What's the biggest power gap that a competitor could exploit?
Step 5 — Output
Produce:
- Full 7 Powers assessment table
- Top 2 powers to prioritize building (with rationale and build path)
- Roadmap items that contribute to moat-building vs. those that don't
- One strategic question: if you could only build one power in the next 12 months, which would create the most durable advantage and why?
