"1) Pricing power > cost advantages"

"Consumer advantage: can charge a premium without getting undercut"

"Production advantage: can undercut price while maintaining attractive margin"

"evidence suggests that differences in customer willingness to pay (pricing advantage) account for more of the profit variability among competitors than disparities in cost levels (cost advantages)"

"Translation: pricing power > cost advantages."

"Supply side returns to scale (i.e. unit costs) eventually level off and/or reverse due to bureaucracy, complexity or input scarcity."

"On the flipside, positive feedback on demand have no such point of diminished return. Basically, there is a downward limit on unit costs while there is no upper limit on price premium."

"SaaS businesses would do well to focus more on building “price moat”."

"2) Exit costs is a better way to think about entry barrier"

"Unlike entry barriers which just focus on the upfront cost to enter the game, exit costs also incorporate the idea of transfer-ability of assets or – in startup lingo – the ability to pivot."

"The same concept can apply to intangible assets like brand (I doubt Harley Davidson mini-vans would fly off the lot, despite Harley’s substantial brand investment over the last 50+ years)."

"High exit costs should discourage new entrants, not only because of the upfront cost to enter the game but also because of the lack of optionality if demand flops or competition heats up."

"When the investors evaluated the opportunity, I’m quite certain they took some comfort in the significant optionality attached to the asset."

"The use cases for this unique technology are virtually limitless."