Earlier quoted context omitted.
> I hear a lot of talk surrounding their "moat" and many skeptics are questioning whether or not they will be able to maintain their competitive advantage. Why do they need a moat? What happened to all the free market capitalism everyone believes in? Let the better company win out in true competition? Or is that just a taking point, and everyone actually believes in building moats to avoid competition?
A moat is what enables you to avoid being in a race-to-the-bottom commodity business. In a commodity business you get just enough returns to cover cost of capital plus a little bit. With a moat you can get 20% - 30% profit margins: Coca-Cola, Apple, Google. A moat is also what builds an enduring business. The moat is what prevents other people from just doing that same thing you are doing but at a lower price. A moat…
Every time you say you don't want to be in a commodity business, you're saying you don't believe in free market capitalism. You don't want competition.