One of the biggest shifts happening in software is that defensibility is being redefined in plain sight. For decades, the dominant strategic framework in tech was the moat: own the customer relationship, control the data, increase switching costs, build proprietary workflows, and create enough friction that competitors struggle to displace you. The metaphor was always medieval because the thinking was medieval. Build the castle, widen the moat, raise the drawbridge.
That model worked when software was more self-contained and the company controlling the application often controlled the market. But in an AI native, API driven, increasingly headless world, that logic is becoming less complete. As software becomes more modular and intelligence gets abstracted across models, agents and interoperable systems, advantage increasingly comes not just from what you own, but from what you enable to move through you.
That is why I keep coming back to a different metaphor: canals.
Many traditional moats now look less like durable strategic assets and more like constraints disguised as strengths. They preserve incumbency, but often by trapping users in friction, isolating data, discouraging interoperability and confusing dependency with loyalty. They can be excellent at defending a position, but much worse at creating new forms of compounding value. A moat protects territory. A canal creates commerce.
A canal is not openness for openness’ sake. It is engineered flow. It is infrastructure designed to route value more efficiently, and it becomes stronger as more activity passes through it. Historically, moats protected kingdoms, while canals expanded economies. One is fundamentally about exclusion. The other is fundamentally about circulation.
That feels much closer to how many of the strongest modern technology businesses actually work.
Stripe became powerful not because it locked merchants into a fortress, but because it became programmable rails for commerce. Twilio did something similar by turning communications into infrastructure. Amazon Web Services did not merely build a protected software business, it became a channel through which entire ecosystems operate. Their defensibility is not only in what they own, but in the amount of movement they facilitate.
Instead of asking how to increase dependence through lock in, it asks how to increase centrality through throughput. Instead of treating defensibility as the ability to keep others out, it treats defensibility as becoming the route others rely on. That is a much more expansive view of platform power, and I think it matters even more in an AI era where value increasingly accrues to orchestration.
Because in a world of APIs, agents, and composable systems, a huge amount of value may flow not to those who control the endpoint, but to those who facilitate movement between endpoints. Movement of data, decisions, trust, transactions, distribution. The economic leverage shifts toward those who sit in the flow.
That is a very different kind of strategic position than the classic moat.
It also changes how founders should think about building. For years the instinctive question was “how do we deepen our moat?” Increasingly the better question may be “how do we become a canal others cannot afford to bypass?” That framing pushes you to think less about captivity and more about indispensability. Less about forcing retention and more about earning embeddedness.
It also creates a much sharper lens for what a real platform is. A platform is not simply a product with APIs attached. A platform is something others can build through, distribute through, transact through and coordinate through. It does not just capture value at the edge. It increases value in motion. That is a different economic model.
And I think it explains something important about where software is heading. Many moats scale through exclusion, but canals scale through throughput. One preserves scarcity. The other compounds activity. In a world where networks, ecosystems and machine mediated workflows increasingly drive outcomes, throughput may be the more powerful form of defensibility.
That may be the deeper shift underway in modern software. We are moving from a worldview organized around protecting the castle to one organized around owning the route. From building walls around value to becoming the infrastructure through which value travels.
And historically, routes tend to outlast empires.
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