The moat concept is akin to barriers-to-entry; it has most notably been popularized by Warren Buffett, who explained in 1995 – while talking about how Berkshire Hathaway found businesses in which to invest:

"We're trying to find a business with a wide and long-lasting moat around it." [...] "It can be because it's the low-cost producer in some area, it can be because it has a natural franchise because of surface capabilities, it could be because of its position in the consumers' mind, it can be because of a technological advantage, [...] that it has this moat around it."

A moat helps firms to retain a leadership position and increase margins. "Economists refer to such margins as "monopoly profits", since they are earned because of competitive imperfections. They would disappear in perfectly competitive markets." These imperfections provide for excesses that only last until competitors catch up.

Therefore, entrepreneurs' goal is to prolong the durability of their advantage and prevent catching up and/or imitation as long as possible by building moats around their product.

https://lh3.googleusercontent.com/a5d1TQYSbKoaSEL6756_IxmzrSj5m9Y0szA0EKv-PDeaTVJ5cq4iNzyTi6EyxwNBl-Lo12YI1ZA9a9KNp9uP0q577BVi3lm3bOTYPOeKm5mltkHPImlsDDlNysEqMDHNXstCx8E

Figure: Berkshire Hathaway invests in businesses with a moat, which protects them from competition