Lore Is The Only Moat
How the collapse of product-market fit killed positioning-first communications
Welcome to all those who’ve subscribed since my last post! This week’s edition is a great one to be on board for, because we’re diving into why lore matters as AI blows up product-market fit.
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Spend 45 nanoseconds with anyone in tech and you’ll hear the term product-market fit. A company can be pre-PMF (spinning, wandering through the wilderness, high beta) or post-PMF (inflecting, the bottom of the S-curve, A Good Company To Join). PMF is the Holy Grail, the hallowed door through which you must walk to be anointed a successful startup. Once you hit it, the legend goes, the challenge transforms from creation to scale: a challenge in its own right, sure, but a much more glamorous one, and not nearly so existential.
Now, of course, AI has changed everything. Creating software products is trivial — so trivial that a humanities major with a Claude Code subscription might recreate more or less the same product that previously required all the overhead of A Company. Companies will no longer grasp the rung of PMF just once in their lifetime; they will have to find it over and over again, a phenomenon Reforge’s Brian Balfour calls Product-Market Fit Collapse.
So what are Companies to do?
The Old World
Traditionally, marketing consultants were focused on positioning. This was a product-first approach. Marketers would descend like so many locusts upon your company to ask you a bunch of questions about how your product compared to everyone else’s and why customers chose your product over theirs, and then they’d tie it together into a pretty bow called differentiation. Successful marketing depended on leaning into this differentiation. Entire corporate brands were built on top of it.
This made sense when building software was a labor-intensive effort that required such administrative overhead as incorporating a company, renting office space, purchasing lots of computing, hiring a bunch of engineers, and so forth. There was a meaningful moat around software creation. If your competitors wanted to beat you, they would have to do all those things too, which gave you a meaningful head start. You knew who was nipping at your heels before they overtook you.
Now, product differentiation can evaporate overnight. I don’t mean that figuratively, as in, products change really fast now, man. I mean that, quite literally, a rando with a subscription to Cursor or Windsurf or whatever can replicate your product between sundown and sunup. They don’t need to know how to code; they can explain what they want in plain English. They can use LegalZoom to incorporate a business within days and set up Stripe for business banking and, without a single employee or any office space, go head-to-head with Your Company on product.
Product differentiation, in other words, has become a house of sand. But if your product is no longer a differentiator, what is?
The New World
Another way of framing this situation is that consumers are now less concerned with outputs. Loyalty to Company A versus Company B cannot solely be based on the outcomes they’ll get from a particular product, because products are rapidly changing — which means who’s winning in a particular category is dynamic, shifting day over day and week over week.
Human brains are not built to keep up with this kind of speed. We are famously pretty slow to update our priors. You see this even in the AI race, where consumers have few pre-established loyalties. I don’t use Claude because it’s definitely the best; I use it because, at one point in time, my impression of it was as the best for my use cases, and then I liked it enough to keep using it. Gemini might be much better! I wouldn’t know; I haven’t had the energy to update my priors by trying it. Besides, I’m bought into Anthropic’s whole deal: the launch of Cowork, their heritage as OpenAI secessionists, their Thinking campaign.
In lieu of caring about outputs, we now have to get people to care about the the inputs, that is, the process. If product-market fit is not a one-way door, a graduation ceremony, a threshold through which a company steps and can never return, then we have to get people to care about the entire journey.
This is what I call lore. Lore is deeper than Positioning or Brand or even the über-trendy Storytelling. Lore is a compilation of the things that make people actually care about you, even when you’re losing — which you’re going to be, at some point, in this Brave New World. Lore is the mythos that attracts not just transactional users but long-term fans, not just mercenary employees but missionaries who sacrifice their discretionary effort at the altar of your shared project. (And yes, one of those lore-things, those mythos-creators, is product. I am not saying product doesn’t matter. People use products to solve problems; if yours doesn’t do that, you’re not going to have any users. I’m saying product is necessary but increasingly insufficient.)
Lore is what makes people climb into the car with you, Thelma and Louise-style, even if you don’t know exactly where you’re going to end up.
And not unlike our good heroines Thelma and Louise, you don’t actually need some grand Vision or a meticulously detailed Messaging Strategy to get people to hop in. You can get pretty far, it turns out, with madcap characters and a general curiosity about what those crazy kids are going to get up to next. If traditional positioning is about charting a careful route to take you from coast to coast, lore is the stories you get to tell years later, cigarette falling from your lip in a motel parking lot, after you jump into the convertible and just start driving, top down.
Another way of saying this is that it is not much fun to be successful. All the fun is in the becoming. And that’s a good thing, because this next era is alllll about becoming, baby.
A Case Study: Palantir
Palantir, where I helped build out their first Communications and Content team, is a great example of lore-first comms.
Palantir is a beautiful counterexample to everything we’ve been taught about positioning. Ask 10 people what Palantir does and you’ll get 15 different answers. Last fall, when WIRED asked CEO Alex Karp to explain the company, he gave a characteristically labyrinthine answer that sounded like something out of a Infinite Jest: “If you’re an intelligence agency, you’re using us to find terrorists and organized criminals while maintaining the security and data protection of your country. Then you have the special forces. How do you know where your troops are? How do you get in and out of the battlefield as safely as possible, avoiding mines, avoiding enemies? Then there’s Palantir on the commercial side. The shorthand is if you’re doing anything that involves operational intelligence, whether it’s analytics or AI, you’re going to have to find something like our products.”
Is Palantir a defense contractor? An AI company? A data platform? A patriotic American institution defending democracy? A dystopian surveillance engine? The company is unintelligible by any traditional positioning metric. It’s why we eschewed traditional Gartner quadrant stuff until well into our life as a public company. We didn’t want to be in the upper-right-hand quadrant of some made-up MBA fever dream. We wanted to do our own thing, on our own terms.
This was pretty annoying to me, one of their first comms hires…right up until the point I saw it working. Palantir didn’t just attract customers and talent; it attracted zealots. The fact that it was illegible by any traditional positioning metric was its strength. People joined Palantir for all sorts of reasons: our bizarro leader, Alex Karp, a German philosophy Ph.D. who describes himself as “geographically monogamous” and, when he’s not cross-country skiing across the globe, lives on a compound in rural New Hampshire; our mission, which fell somewhere between “improve business operations” and “defend the West,” depending on who you asked; the unbelievable talent density, which became a self-fulfilling prophecy, a snowball rolling down a hill.
By traditional positioning metrics, Palantir should compete for mindshare with Snowflake and Tableau. Instead, it is listed alongside the greatest companies of our time: Stripe, Google, OpenAI. That’s the result of lore, the accumulated mythology and mystique around who they are as a company, beyond just what they do as a product.
Lore, in other words, is what makes you a character in a larger story, not just a vendor in a category. It’s what turns great product companies into generational legends.
Legibility Is Replaceability
Ultimately, legibility is replaceability, as we’ve seen with the collapse of product-market fit. Being fully understood is risky.
This doesn’t mean abandoning bottom-of-funnel marketing. You still need to convert revenue. But the companies that become truly generational — the ones whose legacy endures, who cultivate a coterie of superfans — are the ones who invest in long-range storytelling alongside conversion. They walk and chew gum at the same time. Because product-first positioning can’t win in today’s world. Only lore can.
