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What's up, everyone? This is Alex Lieberman, co-founder and executive chairman of Morning Brew.

Welcome back to Founders 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'm talking about switching costs and why they can be a massive

moat for companies of all sizes. Let's hop into it.

If you're a longtime Founders Journal listener, you know that I'm a fan of the book Seven Powers

by Hamilton Helmer. Seven powers breaks down the seven specific strategies that creates

long-term competitive advantage for companies. In past episodes, which I've linked to in the

show notes, we've covered Helmer's first two powers, economies of scale and network effects.

Now it's time to break down the third power that creates long-term success for businesses,

and those are switching costs. I want you to leave this episode understanding what switching costs

are, what features make them powerful, and how to spot them in the wild.

First, let's set the foundation. As the name implies, switching costs are the financial,

organizational, effort, and social costs that you incur when switching from one product to another.

So that's very definitional. Let me give you a slightly different way to think about it.

Let's say you're using brand A, which has very high switching costs, and let's say brand B comes

...