Your Context Is the New Moat: Here's Why
When anyone can build software, context becomes the moat. How five plain Markdown files turn store software into a consultant that knows your business.
Jack Dorsey, co-founder of Twitter and Square, argues that there is no longer any moat in software development. However, companies like Palantir, Instinct, and Emergent have proven otherwise. Palantir's value has increased by 668% in five years, Instinct is valued at $10 billion, and Emergent reached $100 million in annualized revenue within eight months.
The new moat in software development is context. A software that wins in the future will behave more like a consultant who deeply understands a business, tells them what to do, and does much of it for them. The cost of building software has collapsed, and agents can now perform real work. Therefore, the focus should be on understanding the customer's world and providing valuable outcomes.
The software that wins from here will have depth of context, owning the workflow, and delivering outcomes. The context is stored in plain Markdown files, which include SOUL.md/IDENTITY.md (who the agent is), AGENTS.md/CLAUDE.md (how the agent should work), USER.md/MEMORY.md (what the agent should know), SKILL.md (how the agent performs tasks), and USER.md/MEMORY.md (how the agent acts).
These files guide the agent in understanding the customer's business, constraints, preferences, and history. They help the agent make informed decisions, coordinate and execute work, and reliably complete valuable work. As a result, the software becomes a high-powered consultant that provides deep insights into the business and performs tasks on behalf of the user.
Written by urgent.news from HackerNoon's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
