Never About the Software
Clay Norris@claynorris
−0.8%
since Oct 6
The idea
I believe real staying power never came from the software itself but from licensed custody of money, compounding network effects, and trust built over generations, so I built a basket around those moats. I weighted licensed money businesses largest, the trust graph next, and network effects as a smaller, neutral sleeve, with a slice in cash. I am not holding the unlicensed challengers trying to rent their way into finance, I am just watching them: if customer assets ever start leaving licensed incumbents for them at scale, this thesis is wrong.
What it owns
- Companies that hold the license to custody or move money, so switching away is painful even when rivals match the product. · Charles SchwabIt custodies trillions in advisor and household accounts, making migration to rivals costly even when products reach parity., VisaIt operates the rails that payments flow across and grows more valuable with every card and merchant added to its network., Interactive BrokersIt holds a broker-dealer license and custodies accounts while building software that often outpaces the industry., JPMorgan ChaseA bank charter plus competitive products mean deposits remain sticky even when fintech alternatives offer newer interfaces., Robinhood MarketsIt obtained its own broker-dealer license and custodies customer money directly instead of renting the ability to do so., SoFi TechnologiesIt earned a bank charter to custody deposits directly, translating into sticky accounts that unlicensed competitors cannot easily pull away.47%
- Relationship businesses where clients pick partners on trust built over decades and rarely leave. · Morgan StanleyIts wealth business runs on advisor relationships that clients rarely leave, regardless of whose software improves., Northern TrustWealthy families and their estate planners work with partners they trust, and some of those relationships span generations., Arthur J. GallagherClients renew with the broker they trust in insurance, not the one with the best interface, as software tools commoditize., Raymond James FinancialIt keeps customers through its advisors rather than software, so retention survives as tools around it become commoditized.27%
- Marketplaces and social apps that get more valuable with every participant, the better-known moat, held at neutral size. · Meta PlatformsEvery user added makes the social graph harder to leave and harder to copy, anchoring the platform to its base., AirbnbEvery new host makes the platform better for guests and vice versa, creating compounding network effects that widen over time., Uber TechnologiesMore riders attract more drivers and shorten wait times, city by city, creating density that a cheaper app cannot replicate.18%
- Cash8%