The Moat Was Never the Model
Hamilton Helmer’s 7 Powers, run through the GTM stack and healthcare software, lands on one uncomfortable truth: AI doesn’t erase moats evenly. It erases labor.
In 2023 a Google engineer wrote an internal memo that leaked and got passed around every group chat in tech. The title was “We Have No Moat, And Neither Does OpenAI.” The argument was that open-source models were catching up so fast that the labs’ expensive head start was evaporating in weeks. Great product. No moat.
That memo has been in my head for two years, because it names the tension every operator is living through right now. You can have the best product in your category and still have nothing that protects you. And you can have a mediocre product sitting on top of something that competitors cannot touch, and print money for a decade.
The best tool I know for telling those two situations apart is Hamilton Helmer’s 7 Powers. So let me run it through the two worlds I actually work in: the go-to-market software stack, and healthcare software and services. Because when you do, the same answer falls out of both. The moat was never the product. It’s the system and the data around it. And AI is about to make that the only thing that matters.
Power = Benefit + Barrier
Helmer defines Power as the potential for persistent differential returns. Plain version: the ability to stay more profitable than your competitors for a long time, without them competing it away.
Every Power has two parts. A Benefit to you (lower cost, higher price, more value) and a Barrier that stops competitors from arbitraging that benefit away. The benefit is the easy part. Everybody can get a benefit. The barrier is the rare part, and the barrier is the whole game. If a rival can copy your advantage next quarter, you never had a moat. You had a good feature.
He also draws a line most people blur. Operational Excellence is table stakes, the stuff everyone in your category is grinding on to stay in the fight. Power is the durable condition underneath. Being good is not a moat. Being good in a way that others structurally cannot copy is.
The 7 Powers, fast:
Scale Economies. Cost per unit drops as you get bigger. Barrier: a challenger would have to match your share to match your cost, and that is prohibitively expensive.
Network Economies. The product gets more valuable as more people use it. Barrier: a new entrant faces the chicken-and-egg problem of an empty network.
Counter-Positioning. A newcomer adopts a superior business model that the incumbent won’t copy, because copying it would blow up the incumbent’s existing business. Barrier: the incumbent’s own collateral damage. The innovator’s dilemma, weaponized.
Switching Costs. Customers are locked in. Barrier: what a rival would have to spend to compensate a customer for the pain of leaving.
Branding. You charge more because people trust the name. Barrier: the long, uncertain years it takes to build that trust.
Cornered Resource. Preferential access to something coveted: talent, a patent, a dataset, a credential. Barrier: you own it and they don’t.
Process Power. Embedded organizational processes that deliver lower cost or a better product. Barrier: a long, opaque sequence nobody can shortcut, only live through.
Helmer even sequences them. Counter-Positioning and Cornered Resource tend to show up at a company’s origin. Scale, Network, and Switching Costs during the takeoff. Process Power and Branding at maturity. Hold onto that. It matters for who gets attacked next.
The GTM stack: only two moats, and neither is the workflow
Look at the modern revenue stack. CRM (Salesforce, HubSpot). Sales engagement (Outreach, Salesloft). Conversation intelligence (Gong). Data (ZoomInfo, Apollo). Forecasting and RevOps (Clari). Enablement (Highspot). Six neat categories, all describing themselves as mission-critical.
Run 7 Powers across them and the field separates fast.
The strongest Power belongs to the system of record, and only the system of record. That is Switching Costs, and it is enormous. Your CRM has data gravity, every workflow is wired through it, your whole team is trained on it, and a web of integrations hangs off it. Ripping it out is a year of pain nobody volunteers for. That is why Salesforce prints money. Not because the software is beloved. Because leaving is a project no one wants to sponsor.
The second real moat sits with the data players, and it looks like Cornered Resource plus Network. ZoomInfo and Apollo run contributory data co-ops, which is a genuine network effect: every customer makes the dataset better for the next one. And Gong’s actual moat was never the workflow app the reps click around in. It is the largest proprietary corpus of recorded sales conversations on earth. In an AI world, that corpus stops being a feature and becomes a cornered training-data resource.
Then there’s everything in the middle. Sales engagement. Enablement. The point solutions. Thin switching costs, no network effect, no cornered resource. Good products. Real benefit. No barrier. They are features sitting in the open, waiting to be absorbed.
Here is the AI wrinkle, and it is live right now, not a 2030 forecast. AI compresses this stack. Agents can rebuild a workflow cheaply, which means workflow-only tools are the most exposed things in all of B2B SaaS. If your entire company is “we move data from A to B and make it pretty,” an agent does that now. What survives the compression is the system of record and whoever sits on proprietary data. Everything in between gets squeezed.
Healthcare: the gravity well
Now the world I spend most of my time in. Healthcare software has a sun, and everything else is a planet.
The sun is the EMR. Epic, Oracle Health, athenahealth, the vertical urgent care EMRs. This is the deepest moat in all of software, and it is not close. Switching costs here are not “a hard project.” They are data migration plus clinician retraining plus recertification plus rebuilding every integration, all while carrying patient-safety risk at the moment of cutover. Nobody rips out the EMR on a Tuesday to try something they saw in a demo. And that switching-cost wall is reinforced on every side: regulatory certification (ONC), Network Economies as aggregated clinical data flows across the install base, Scale, and a cornered clinical dataset that is quietly becoming the training substrate for clinical AI. There is no soft flank.
Now watch what orbits it. Patient engagement, the scheduling and intake and communication layer (Phreesia, Weave, Luma), is the most exposed category in the well. Moderate-to-low switching costs. Usually a bolt-on. And its real problem is not internal, it is positional. It sits right next to a fortress that keeps expanding outward. The day the EMR ships native scheduling and intake, the standalone vendor doesn’t lose on features. It loses on the bundle. Its entire market can get absorbed by the thing it was orbiting, and no amount of product polish changes the physics.
Revenue cycle management (R1, Waystar, athenahealth’s RCM) is more defensible than people assume, and it’s where the Powers that looked weak in the GTM stack turn strong. Scale Economies from payer connections, clearinghouse relationships, labor pools, and automation spread across enormous claim volume. Switching Costs tied directly to cash flow, which is the one thing no health system will gamble on. And, rarest of all, real Process Power: the opaque, payer-specific machinery of actually getting a claim paid, built and tuned over years. You cannot buy that. You have to have lived it.
Teleradiology (vRad, Radiology Partners) runs on Cornered Resource. The asset is a network of radiologists licensed across many states and credentialed at many hospitals. Licensure times privileges is a combinatorial credentialing barrier that takes years and armies of administrators to assemble. Add Scale from follow-the-sun 24/7 coverage, subspecialty depth, and load balancing, and you get a moat that is genuinely hard to storm.
The two through-lines
Line one. In healthcare, the moat is proximity to two things: the system of record, and cash. The EMR owns the record, which is why it has the deepest switching costs in software and why it keeps eating adjacent categories for breakfast. RCM owns the cash, which buys it deep switching costs and real process power. Any layer that owns neither, patient engagement being the clearest case, is structurally weak no matter how good the product is. Position beats polish. It just does.
Line two, and this is the one to sit with. AI does not erase moats evenly. It erases labor.
Look at what’s actually under attack right now and the pattern is not random. RCM back offices. Radiology reads. GTM workflow execution. Every one of them is a category where the moat leans on human labor, and every one of them is getting counter-positioned by AI-native entrants whose whole pitch is “we do the labor with software.” That is textbook Counter-Positioning, the incumbents can’t fully follow because their P&L, their headcount, and their pricing are all built on the labor they’d have to cannibalize. For now, regulation, liability, and credentialing are holding parts of the line, especially in radiology. For now.
But flip it over. Every category that leans on data gravity, credentialing, regulation, and system-of-record lock-in doesn’t just survive AI. It gets stronger. Because AI turns accumulated proprietary data into the next moat. The EMR’s clinical dataset becomes the training substrate. Gong’s conversation corpus becomes the model. The data that took twenty years to accumulate compounds into an advantage that a well-funded challenger with a better UI cannot buy.
The one question
So the strategic question is the same one the AI labs are fighting about, and it’s the same one whether you run a healthcare software company, a GTM tool, or a services business:
Are you defending labor, or defending the system and the data?
One is a melting moat. You can feel good about it for a few more quarters while the water rises. The other compounds, quietly, while everyone stares at the model.
Pull up your own P&L this week and answer it honestly. Draw the line between the revenue you earn because a task is hard and expensive for a human to do, and the revenue you earn because you sit on data, a record, or a lock-in that a competitor structurally cannot replicate. That ratio is your real valuation. Not your ARR. Not your growth rate. That ratio.
Because the model was never the moat. The system was.