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Their user base is the moat. Same as any network effect business.

If all your peers are using a thing, it's really hard to convince entire industry to switch even if something better is available.






I don't think user base is a moat, at least not for tooling like this. Switching costs is practically zero, as evidence by how quickly Cursor came up and ate Copilot's lunch. Presumably all of Cursor's users switched away from VS Code or another editor. How did that moat go for them?

That’s not a moat when it comes to tooling like this, I can and will cancel my sub when I try something objectively better, there is zero lock in, even if I make a poor choice I can come back.

This is not a moat, the fact there are a bunch of companies hot on their heels proves this too.


By your logic Cursor would have never gained a large user base, because it'd be hard to convince an entire industry to switch off VS Code.

Network effect only works as a moat for networks.


Early adopters are the most fickle version of a user moat I can imagine.

We're talking about an IDE, switching is pretty frictionless.

Well, switching IDEs can actually be hard due to all the integrations. But this is VScode to VSCode …

Network effect? What network?

LLM users, known for their strong brand loyalty.

Twitter and FB have terrible brands yet network effect and inertia is all they need to stay profitable billion dollar businesses

True, but they don't have a dozen of identical competitors - and there is much less friction switching between AI models.



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