Context as a Competitive Moat
Identifying your data gravity in the age of AI
We all know that bad data in = bad data out.
When contract data is unstructured, everything downstream suffers.
Manual billing and invoices, messy spreadsheets, and hours of reconciliation that never quite tie out.
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Trusted by companies like Cortex, Statsig, and Cursor, Tabs powers the finance teams behind the next wave of category leaders.
Fix the way money enters the building.
The value of context is at an all time high.
In the age of AI, your most valuable asset might not be your IP, team, or GTM strategy… but your context.
David Breach, President and COO of Vista Equity, put it plainly:
“The risk and opportunity with AI is data sovereignty and control over important and unique data sets and workflows.”
If done correctly, data with context is your moat to both allow you to take advantage of the GenAI opportunity, and also defend yourself against the risk of AI making you the next Chegg.
The companies best positioned to ride the GenAI wave are the ones who already have rich, proprietary data and high-context workflows. Not because they can spin up a chatbot, but because they can train it on something no one else has access to.
That’s your moat.
Here’s a simple way to assess what kind of gravity your systems create, and how defensible your AI advantage really is.
Data Gravity
“Data gravity, think of it like the Oracle database, which is you're the biggest pool of data. The data that is the most mission critical.” - Dave Yuan, Tidemark
Data Gravity refers to the centrality of systems that manage critical business data.
In a hotel, for instance, the property management system can be seen as having data gravity since it holds essential data like room availability, employee information, bookings, and customer details.
In businesses where financial transactions are core, systems like the General Ledger (GL) or point of sale systems, which manage financial and sales data, exhibit strong data gravity.
Ask yourself: What data set, if removed, would materially impair our customer’s ability to operate?
Workflow Gravity
“Workflow gravity is the automation that allows you to do the most important things, right? Think about the most important jobs to be done. A lot of times it's finding customers” - Dave Yuan, Tidemark
Workflow Gravity pertains to the significance of systems that streamline and automate the most crucial operational tasks of a business.
Workflow gravity = where do things get done?
For instance, in a logistics company, a supply chain management system epitomizes workflow gravity. This system is essential for coordinating transportation, managing inventory, scheduling deliveries, and tracking shipments. It consolidates various logistical tasks into a single, efficient workflow, crucial for timely delivery and maintaining customer satisfaction.
By centralizing these critical operations, the system becomes the backbone of the company's day-to-day activities.
Ask yourself: What system drives the operational cadence of our customer’s business? What powers their revenue engine?
Account Gravity
“What's the most important, what has the most mind share with the owner? The nice part with within SMB customers is that oftentimes the owner is the user or certainly very close to the products. And so you have a lot of mind share with the owner. It allows you to sell that owner multiple things.” - Dave Yuan, Tidemark
Account Gravity focuses on the influence and priority given to systems that align closely with the strategic interests and decision-making processes of business owners or top management. In other words - which application does the owner care about the most? Where do they spend most of their time?
This one’s psychological. It’s not just where the data lives, but where the CEO lives.
For example, in a digital marketing agency, the campaign management platform holds substantial account gravity. This platform is pivotal for planning, executing, and monitoring marketing campaigns across various digital channels. It's where the business owner or senior managers spend a significant amount of time analyzing campaign performance, making strategic decisions, and optimizing marketing efforts.
The system’s direct impact on client acquisition and revenue generation makes it a primary focus of the business leadership, embodying strong account gravity.
Ask yourself: What’s the first app our customer’s owner opens in the morning? What tab does the CEO keep pinned?
Owned, Not Rented
You can’t just rent your way to AI leverage. If the data isn’t yours, or if it’s locked inside rented pipes, you’re building on sand.
There are some companies out there who do not have proprietary data rights, and they lack dominion over the customer workflows.
The question becomes: will they have the right to exist in five years?
Counterintuitively, once “commodity” note taking and productivity apps like Asana, Airtable, and Notion are suddenly well positioned to benefit from AI. As someone who uses Notion to keep track of things across my personal and business life, from that one meeting with a VC back in 2019 to a list of gyms in our new town, there’s a whole lot of data gravity. And that context lends itself to workflow expansion.
How will your company use data as a moat and a pathway for expansion? If you’re looking for inspiration, here are three examples of real companies who might use their context rich data as a force multiplier to expand TAM:
1. Notion
Core product: Note-taking and team docs
Context they own: Meeting notes, to-dos, project plans (how teams think and make decisions)
Where they can expand: Task management (Asana), knowledge management (Confluence), lightweight CRM or OKR tools, because they already know what’s top of mind for the team
2. Toast
Core product: Point-of-sale system for restaurants
Context they own: Real-time sales, employee hours, table turns, menu pricing
Where they can expand: Scheduling (7shifts), vendor payments (Bill.com), SMB lending (Square Capital), because they know who’s selling what and when
3. Clio (legal practice management)
Data context: Case files, time tracking, billing history, court deadlines
Why it matters: It's where solo and small-firm attorneys run their entire workflow
AI/TAM expansion: Agents could summarize case notes, generate filings, or surface relevant precedents, expanding into legal research or paralegal support
Some businesses won’t survive this transition; not because their product is bad, but because their context is weak.
This is your wake-up call. Figure out where gravity already exists in your business. What goldmine are you sitting on?
Then ask: Can we use it to bend time, shrink cost, or increase throughput?
For those who operate vertical software companies and think a lot about data gravity, check out this podcast I did with Dave Yuan of Tidemark. It’s perhaps the most signal per minute on how VSaaS companies should think about product sequencing and metrics to measure success.