TL;DR: Branding is an emotional asset that earns willingness to pay a premium. Takes decades to build, can be destroyed in a week. Non-exclusive (everyone can have one) but geographically bounded (yours only works where it works). Almost no startup actually has a brand. They have awareness, which is a different and much weaker thing.
What it means
Branding is not awareness. It is not a logo, not a tagline, not your Twitter follower count. It’s actual affective valence — when customers encounter your brand, they feel something, and that feeling translates into willingness to pay more than they would for a functionally equivalent alternative. Prada’s handbag costs more than a functionally identical handbag because of an emotional asset attached to the brand. The asset took decades to deposit and the customer is paying you to access it. That is what a brand is.
Branding is misnamed as a moat in most strategy decks because it is slow, fragile, and non-exclusive. You can build it deliberately, but only over decades. You can destroy it overnight with a scandal, a recall, or a single tone-deaf product launch. And many competitors can hold strong brands simultaneously — there is no upper limit on how many premium luxury brands can coexist in a category. The Power is in the premium; the defensive moat is surprisingly thin compared to other Power types.
The argument
Geography is destiny. Sony had powerful branding in the United States and almost none in Japan, where local competitors dominated the same category. Branding is a cultural asset, and cultural boundaries are real. You can’t expand a brand geographically as easily as you can scale a product. Each new market requires rebuilding from scratch — sometimes with a different name, different positioning, different price point. This is the most underrated cost of international expansion and the one founders most consistently underestimate.
Duration is decades, fragility is immediate. Ferrari spent generations building emotional association with performance and exclusivity. One recall, one scandal, one leadership misstep with bad optics, and the brand equity evaporates faster than the engineering team can recover. The asymmetry is brutal: decades to build, weeks to destroy. That’s what makes branding risky as a sole moat — the variance is enormous and the downside is permanent.
Branding usually emerges after dominance, not before. You typically can’t brand your way into a market. You need to dominate first through scale-economies, switching-costs, or network-effects, and then layer branding on top as a premium extractor (seven-powers). The inverse — building brand-first and hoping it drives adoption — almost never works without another Power underneath. (The exceptions are luxury and lifestyle categories where the brand is the product, and even there it usually took the founder decades of personal reputation-building beforehand.)
The cleanest modern example
ChatGPT is the fastest brand build in software history. The verb test is the easiest measure: “did you ChatGPT it?” — that’s a brand. Two years after launch, despite Llama, Mistral, DeepSeek, and Claude all matching or beating GPT-4 on benchmarks at various points, the verb is still ChatGPT. The brand has decoupled from the model, which is the textbook sign of a genuinely durable brand asset. Distribution beat capability, and the durable form of “distribution” turned out to be brand (distribution, google-no-moat).