How to Build a Personal Moat to Further Your Career

What's up, everyone. This is Alex Lieberman, co-founder and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. Today, I am talking about building your own personal moat. Let's hop into it. 

Building your own personal moat

All of the time we talk about companies building moats. For example, Netflix has the amazing moat of economies of scale. So does AWS, or Amazon web services. Apple and Salesforce have the amazing mode of switching costs. Louis Vuitton and Rolex have branding. Now understanding the different drivers of company power and modes is super important. And if you're looking for a resource on this Hamilton Hemler has written an amazing book. It's become like the Bible for competitive advantage in business. It's called Seven Powers. But what isn't talked about enough is this concept that Eric Torenberg, the founder of On Deck calls personal moats. So here's how I think about a personal moat.

Examples of personal moats

A personal moat is basically the company equivalent, but for an individual worker. If you want to understand what your personal moat is, you need to ask yourself the question: Do I have a unique accumulating advantage in my career? And if so, what is it? So if a personal moat is a unique accumulating advantage, that is a mouthful, what does that actually mean? And what does it look like in practice. To build a personal moat, you need an asset that is hard to build, it is unique to your interests and talents, and it accrues value when you sleep. So let me give you a few examples. I'll give you two massive names and then someone near and dear to my heart, who's a good example of just like a worker, just like you or I. So, first example is Gary Vee. Gary Vee his specific, unique interest is building businesses. He has a love for the game of building businesses and his amalgamation of skills includes self-awareness, empathy, and storytelling. And when I talk about empathy, what I really mean is his understanding of consumer trends and where consumer behavior is going and being ahead of where the puck is going. And the asset that he has built by basically combining self-awareness, empathy, and storytelling within the context of building businesses is a massive engaged audience that accrues value when he sleeps, meaning his YouTube audience, his Twitter audiences, Instagram audience, as well as a massive business in VaynerMedia, as well as his NFT project, which is VeeFriends.

Second example, not related to business, but related to the concept of personal moats: Brené Brown. Her interest is, I would say, the human condition, understanding people, how we think, and the things that hold us back. Her skills include a deep understanding of people given just her background and all of her studies in social work and psychology, as well as being a great storyteller. Now, the combination of those skills has led to the asset that is her writing books that sell when she sleeps, as well as creating videos that are watched when she's not looking. That's the second example. Third and final example, had to put this one in here, is my fiancée. So again, she's like you and me, she's mid-career, you know, 29 years old, working in tech, her interest is brand strategy. Her skills include critical thinking, high EQ, and strong public speaking. And the asset that she has created is what I would call social currency, or another word is a reputation for being an amazing relationship builder and strategic partner with some of the largest brands in the world. So something that is important to note here is it's not just about accumulating specific knowledge or building specific skills to build a personal moat. It is all about the mixture that creates a massive unlock in your career. So maybe there are a lot of critical thinkers. Maybe there are a lot of high-EQ folks, but the question is, are there a lot of critical thinkers who are high EQ and speak publicly really well? It's definitely a narrower group. Now, David Perell refers to this mixture of a few different interests or skills. In the context of writing he calls it a personal monopoly, but I think the exact same thing exists for skills and knowledge in career. Now, when I talk about this idea of assets, right, I talked about Gary Vee having the asset of his business, as well as his audience or Brené Brown having the asset of her audience, or my fiancée having the asset of reputation.

Assets you need to be successful

 I think there are generally two types of assets that we all seek to have successful careers. You don't need to have both of these assets to be successful, but I do believe you need one. 

The first asset is what I call social currency. So that is network, reputation, and brand that is accumulated from demonstrating specific knowledge or skills for a long period of time. And the second is financial currency, basically wealth that is accumulated by leveraging your specific knowledge or skills to command either higher compensation as an employee or higher profit and valuation as an entrepreneur. And we'll get to this distinction of employee versus entrepreneur in a minute. So as you think about your personal moat, what you don't want to focus on are skills or knowledge that are fleeting or easily commoditized or dependent on others. Things like awards. So for example, Forbes 30 Under 30 sounds great, but does not have a ton of longevity tied to it. It's not going to give you opportunity or allow you to build social currency or financial currency for the extent of your career, and also it is you being dependent on the brand of Forbes 30 Under 30 as the brand evolves, and potentially more people get the award and it becomes diluted. You've put your entire social capital in that award. If you haven't spent time accumulating knowledge or interests in other things. The second is a large audience that's not engaged. Gary Vee has built a massive asset, not because he has a massive audience, but because he has a massive audience that feeds first content and engages with it. The third is shallow knowledge around a number of things. If you're going to become an expert around something, truly become an expert. So few people understand what it truly means to go down the rabbit hole and become world-class in a skill or understanding a topic. And the fourth is undifferentiated skills. And what I mean by that are skills that are not hard to develop, skills that are relatively commoditized, basically skills that you could easily outsource to someone else. And as you think about the asset that you want to build up based on your skills and knowledge, keep in mind as the internet and technology have commoditized more and more things, there are a finite number of things that let you build an asset. 

What skills are scarce in the internet age? 

So to think about that, think about what is scarce in an internet age. The first is rare or valuable skills. And the second is specific knowledge. That is really it. So while I said a minute ago, that it is the mixture of skills that matters most, and what I call this is, skillset-role fit, basically, how well does the mix of your skills make you really good for the specific role that you're in? All of that said, I do think there are a number of skills that are uniquely powerful skills in 2022. 

There's four of them in my mind, the first is engineering, speaking, the language of technology, especially in an age where there is more demand for engineering talent than ever before and there's never enough supply, that's the first. The second is content creation and audience building. We live in an age of abundance. Social platforms have given people the tools to create more content than ever before. Understanding how to create specific content for specific audience that solves a specific need and build an engaged audience is a generational skill. The third is critical thinking, this is the skill that unfortunately I see the least in professionals, but it is the skill that will be important no matter where technology is, because it is what allows you to understand how to shift gears or change based on information that you get. And the fourth is EQ, this is the perennially underrated skill, because it's not sexy, because it relates to quote unquote soft skills, but things like empathy, conflict management, loving candor, again, they sound fluffy, but at the end of the day, those are the most important skills to be able to run and scale a business. So those are the four uniquely powerful skills today. 

Two thoughts about knowledge

And then on the knowledge side, I have two thoughts. The first is focus on accumulating knowledge in areas that deeply interest you. This is the answer that is less focused on where the world is going and is more focused on the belief that if there is a topic that interests you really deeply, and you think you'll be interested in it for a long time, you will simply just end up in a good place because your passion will drive you deeper than anyone else is willing to go. And there are a lot of different industries to be able to make a lot of money or get a lot of social currency if that is what you desire. Now, the second approach is, focus on areas that will be big, five to 10 years from now. So this is, if, say, you don't have a specific passion, and you're trying to figure out, where do you allocate your time, focus on where the puck is going. And the way that Chris Dixon, who is a thought leader in the world of crypto, he's a partner at Andreessen Horowitz, the way he describes basically the areas where the puck is going is he says, these are things that people are working on during their weekends today, but in five to 10 years, it will be what everyone is spending their weekdays working on. And so in the context of number two, basically the areas that will be big five to 10 years from now, there are a few areas where I believe the puck is going, where it will benefit you to go deep and build deep knowledge in these areas: Web3 and crypto, fintech, health tech, the creator economy, and sustainable businesses.

Now let's finish up with personalizing this to you. How should you be thinking about building your own personal moat? 

Two main ways to establish your personal moat

Well, there are two main ways to establish them in your career in terms of direction. The first is build a personal moat by starting a business. The strongest personal moat is starting your own company and especially a successful company. Obviously it's very difficult, but it is less risky than people think. Founders get disproportionate financial upside, networking upside, and credit honestly for the work of others. External facing founders are basically building their network all day via meetings with investors, hires, or other founders and employees are building a founder's network and credibility on their behalf. Again, there's risk that's being assumed for that, but there's amazing leverage created by starting your own business. And all of these things build a moat, such that if the business fails, you have created a ton of optionality for whatever your next thing is, whether it's starting another business, joining a VC, getting a really cool job. That said starting a company is not for everyone. Not everyone wants to build a business and that's totally fine. The second path is becoming an indispensable employee. The employee where a founder in a company or a manager is like, we cannot lose this person. We will pay them whatever it takes to get them to stay. Every company has those people. And the question is, how do you become one of those people?

And by the way, this is a very viable path. You don't have to start companies to build a personal moat, but what you will do is you're going to rely less on reputation and brand that accrues from building a business and more on specific skills or a knowledge base to build an asset that gives you a moat. And so what Andrew Chen, who is the VC, the author, you know, the growth guru, he calls it, having a thing, basically. What is your thing, your specific X-Factor that helps companies with a very core need? And the core need that he focuses on or that he describes are fundraising, sales and business development, engineering, and unbelievable ability to recruit talent. So if you're not trying to build your own company and instead you're trying to become an indispensable employee, here's the playbook for building a moat: Pick a skill or a knowledge base that you want to build up, that you're interested in, and believe companies will always need. Build up that skill through hard work, which gives you social capital, because you become known for that skill that the company needs you for that skill. And then finally leverage that skill or that knowledge and the social capital that you've built up from it to secure positions in companies that transition social capital into financial capital so you can build wealth. And that is how I think about building personal moats.

I want to hear from you

Now I would love to hear from you but quickly, I just want to give another shout out to Eric Torenberg from On Deck. He wrote an amazing thread that I will link to in the show notes about the idea of personal moats. So I just want to give him props for an amazing thread on that. Let's hear from you now. When you think about your own personal moat, what is it, or how are you building towards it? Said differently, what are the mix of skills or knowledge that you are creating such that you will get unique compounding advantages in your career over time? Shoot me an email to alex@morningbrew.com and I will share a few of the best responses in an upcoming episode. Thanks again for listening, and I'll catch you next episode.