Castle Moat Irrelevance Theory

A theory about how dominant companies typically don't get beaten by direct competitors, but rather become less relevant as attention shifts to new areas.

Core Concept

• Companies that dominate are like castles with huge moats
• Direct competitors trying to "siege the castle" usually fail
• Success comes from building in entirely new territories
• The original castle becomes less relevant rather than conquered

Historical Examples

• Microsoft vs IBM

  • Microsoft didn't beat IBM at hardware
  • They built in new territory (operating systems/software)
  • Changed where value was created

• Mobile vs Desktop

  • Facebook dominated desktop social
  • Instagram/WhatsApp won by focusing on mobile
  • They outpaced Facebook's growth without directly competing

• Internet vs Operating Systems

  • Microsoft missed the internet revolution
  • Google/Amazon/Facebook built empires in new territory
  • Operating system dominance became less important

Current Applications

• AI vs Traditional Search

  • Google dominates traditional search
  • AI companies aren't trying to build better search
  • They're making search itself less relevant
  • AI agents may replace need for manual searching

• Electric vs Gas Cars

  • Traditional manufacturers focused on improving gas engines
  • Tesla succeeded by building in new territory (electric)
  • Changed the fundamental approach rather than competing directly

Key Takeaway

• Don't try to take someone's castle
• Find fertile unclaimed territory
• Build something new where attention is shifting
• Let the old castle become less relevant naturally