The Pulse [Signals]: Make Your Moat, the Business
Your weekly digest of hand-picked, high-impact perspectives from Beehiiv, Reddit, Medium, Substack and online voices, curated for SME resilience in a fast-changing world.
Thursday 12th February 2026
[3 min read]
The Signals This Week
Every SME claims differentiation. Few can explain their moat under scrutiny. Across healthtech, fintech, startup strategy and investor commentary, one theme is consistent: a product is not a moat. Regulation, data, network position, capital intensity and structural advantage create protection. Everything else is marketing.
If your advantage disappears when pricing tightens, competitors copy you, or regulation shifts, it was never a moat.
1. Signal - Web: Regulation as a Compounding Asset
Source: Nelson Advisors | READ HERE >>>
The Gist: EU MDR and IVDR compliance in healthtech and medtech act as capital-intensive barriers. The cost, time and operational rigour required to secure and maintain approvals compound over time. Once achieved, these approvals increase valuation defensibility and reduce competitive threat.
The [Pulse] Interpretation: Regulation isn’t friction. It’s leverage. SMEs that treat compliance as an asset, not a burden, build structural protection competitors cannot cheaply replicate.
2. Signal - Medium: Your Moat Is Not Your Product
Source: Kenechi | READ HERE >>>
The Gist: Founders struggle in due diligence when asked to articulate their moat. Features, branding and UX improvements do not count. Durable advantages come from network effects, proprietary data, regulatory positioning or cost structure advantages.
The [Pulse] Interpretation: If your moat requires constant explanation, it likely isn’t one. Investors look for structural advantage, not narrative strength.
3. Signal - Linkedin: Regulation Widens the Gap
Source: Majed Alshafeai | READ HERE >>>
The Gist: In Saudi Arabia’s BNPL market, regulatory tightening favours scaled operators. Compliance demands increase cost thresholds, benefiting incumbents with capital and infrastructure while squeezing smaller entrants.
The [Pulse] Interpretation: When markets consolidate, regulation accelerates the divide. Scale plus compliance becomes self-reinforcing. SMEs must decide whether to build toward that scale or reposition entirely.
4. Signal - Substack: The Illusion of the Moat
Source: Subodh Bhide | READ HERE >>>
The Gist: Investors are often deceived by businesses that appear differentiated but operate in commoditised markets. Temporary strength is mistaken for a durable advantage. When pricing pressure arrives, the illusion collapses.
The [Pulse] Interpretation: Perceived strength is not protection. If customers switch on price or convenience, your moat is imaginary.
Florido Recommends - This Week’s Strategic Action
Run a Moat Audit
Identify the structural advantages competitors cannot replicate within 24 months
Quantify the capital, regulatory or network barriers protecting you
Test what happens to margin and retention if pricing tightens by 10%
To keep your valuation safe through 2030, boards and investors need to stop chasing "shiny" tools and start betting on companies that are so deeply woven into their customers' daily operations that it would be a total nightmare to replace them.
The "Moat Audit" Checklist
Use these five questions to cut through the fluff at your next offsite:
The "Power Off" Test: If we went offline for 48 hours, would our customers’ businesses merely be annoyed, or would their entire operation grind to a halt?
The "AI Clone" Stress Test: Could a competitor use a generative agent to replicate our core user experience by next month?
The Plumbing Question: Are we the "paint on the walls" (easy to change) or the "pipes under the floor" (expensive and messy to rip out)?
The Relationship Anchor: Do we own the customer relationship through deep, human-led trust, or is it purely transactional through a screen?
The Data Loop: Does our product actually get harder to leave the longer they use it, or is the value the same on Day 1,000 as it was on Day 1?
Stay tuned. Keep your finger on The Pulse.
Don't just react to the market. Anticipate it.