A personal brand as an economic moat

I was recently asked why I spend time building my personal brand, rather than focus on building brand within my business.

Here's my take:

Every business should aim to build an economic moat.?

A defence against competitors. A hurdle to make taking your castle much more gruelling.

A moat maintains a brand’s edge. A distinct advantage a company has over competitors. If it’s deep enough, a moat protects a company’s market share and profitability.

After network effects, the most powerful moat is a Brand.

A brand allows a company to convert commodities into valuable goods. All it takes is a slap of a logo and some good copy.

“Buy commodities, sell brands” - Warren Buffett.

Brands are hard to start. The best ones take decades to build. A normal person can’t build Coke or Toyota.

Buying a moat is also hard. The opportunity to buy a business with a brand moat is rare, and expensive, by design.

The newest type of moat is a Personal Moat.?

A personal brand. A following, a community.?

People who listen to you.

Until the internet, having a personal brand wasn’t that great. You were reliant on middle men - TV networks, radio or newspapers. They owned the audience.

The internet has upended this. Everyone has a platform at their fingertips to connect with their desired audience.?

Via a blog, podcast, Youtube. There is no middle man via these mediums.

The barriers to entry to building a brand have never been lower.?

So why doesn’t everyone build a personal brand?

Because building a brand comes with accountability.

Every business is accountable to someone. Accountability to its values, its customers, its employees.?

Being personally accountable to the market increases the stakes.?

As an employee, you can walk away from a brand that has a tarnished, even ruined reputation.

But if your personal brand is damaged, you are stuck with that forever.?

Building a personal brand is therefore risky.?

“the most accountable people have singular, public and risky brands: Oprah, Trump, Kanye, Musk.”? - Naval Ravikant

But what comes with risk comes reward.

And herein lies the personal conundrum: The question of whether to build a personal brand verse a company brand.

The equity and moat lies in the brand.?

So the question comes back to this:

Do I invest the efforts in building the moat of my company, or dig the moat around my personal castle?

The advantages of building a personal brand moat:

• A strong personal brand is inherently a moat: “Escape competition with authenticity” - why go through the effort of creating a separate voice in a distinct entity?
• I have dedicated the rest of my professional career to building Arbor Group: so they are inherently linked.
• I carry this moat forever: This can be leveraged into other projects
• A personal moat is a cheap insurance policy - businesses can fail, but a following exists as long as I want it. A podcaster, business person or blogger can go bankrupt - and keep their following. You’re never starting from scratch.

The disadvantages of building the personal brand moat:

• It can’t be outsourced...requiring my personal time effort. Does that make me a slave to myself??
• I am personally accountable for every single element of my actions, voice and decisions. This has ramifications.
• The more known someone is, the more likely they will be publicly attacked, criticised - do I want to be publicly exposed to that level of criticism?

Another thought exercise to consider is the ‘halo effect’ that a personal brand has on a company brand. For example, how much of Elon Musk’s personal brand is driving Tesla’s share price?

How do you quantify that Key Man risk?

My conclusion

All things considered, the true value of building a personal brand compared to a company brand is the flexibility it provides.

We all evolve. Our projects will too. The personal brand moat is an asset I can carry in my toolbelt.?

It’s a portable moat that can be leveraged to build other castles.