TIP744: HIDDEN MONOPOLIES

W/ KYLE GRIEVE

TIP744: HIDDEN MONOPOLIES W/ KYLE GRIEVE

09 August 2025

On today’s episode, Kyle Grieve discusses a thought-provoking framework that redefines competitive advantage through the lens of customer loyalty. Kyle breaks down the five types of customer loyalty moats, introduces the Moat Strength Index (MSI), and explains how investors can use this approach to measure, monitor, and deepen their conviction in high-quality businesses.

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IN THIS EPISODE, YOU’LL LEARN:

  • Why scale effects are ineffective against disruption via innovation
  • Why having high customer loyalty is so powerful as an advantage vs competitors
  • The five customer loyalty moats you must know
  • Why ecosystem moats are so hard to build, but generate significant customer loyalty
  • How platform moats generate powerful customer loyalty between multiple parties
  • How can we objectively measure a company’s moat using customer loyalty advantages
  • The nine failures in using retention-like KPI’s
  • The three barriers that create customer loyalty
  • Why the moat score index is such a handy tool for measuring moat
  • How customer loyalty moats can be disrupted
  • And so much more!

 

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:02] Kyle Grieve: Have you ever owned a company that looked great on paper? You know the type that has strong financials, a big chunk of market share, and even a recognizable brand only to watch those advantages slowly melt away while you’re not alone. Even legends like Warren Buffett and Peter Lynch have spent years focusing on traditional competitive advantages such as economies of scale and cost efficiencies.

[00:00:23] Kyle Grieve: But there are plenty of cases where those advantages just weren’t enough. The issue with viewing businesses solely through that lens is that you can miss one of the most potent value creating forces out there. Customer loyalty. Today I’m going to walk you through a fresh approach to identifying enduring competitive advantages.

[00:00:39] Kyle Grieve: This framework flips the script, shifting the focus away from how a business stacks up against its competitors and toward the strength of its relationship with its customers. We’ll dive into the five types of customer loyalty moats, all built around increasing switching costs, and we’ll look at how to score a business’s customer loyalty in a more objective and structured way.

[00:00:59] Kyle Grieve: Now one of the biggest traps investors fall into is thinking about moats in black and white terms. Either a business has one or it doesn’t, but in reality, moats exist on a spectrum. Some are getting stronger, some are eroding, and that distinction really matters. This episode will give you a simple scoring system to help assess the strength and more importantly, the direction of a company’s moat.

[00:01:21] Kyle Grieve: It’s a practical tool that can sharpen your thinking, increase conviction, and help you avoid costly analytical errors. If you’re a long-term investor who wants to understand why some companies keep customers coming back for years, while others fade into irrelevance, this episode is for you. Now let’s get into this week’s episode on customer loyalty.

[00:01:42] Intro: Since 2014 and through more than 180 million downloads, we’ve studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Kyle Grieve.

[00:02:07] Kyle Grieve: Welcome to The Investor’s Podcast. I’m your host, Kyle Grieve, and today we’re going to discuss a book with a pretty novel idea. It’s pretty tough to find investing books that aren’t just, you know, rehashing the core concepts of value investing. Now, while it’s good to be reminded of value investing’s core concepts and its history, it’s also great to see new important ideas that could be added to a framework to make Gus a better investor.

[00:02:30] Kyle Grieve: Today I’m going to discuss one such book. Which is called Investing in Hidden Monopolies by Patrick Wierckx. The book’s premise is simple, why customer loyalty creates superior moats and how you can profit from it. Let’s start with how most investors look at a business’s competitive advantage. This is achieved through the classic aspect of investing, such as examining a company through the lens of its advantages over its competitors.

 

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