sorta rambly thoughts but "framework" for thinking about building startups ready for a powerful ai; most companies ik and founders i talk to seem to just skirt this problem, and i feel like that was fine to do last year more so but increasingly less fine
i've been finding it hard to see through the fog of war what the future looks like in terms of what are real durable business and not - this is an evolving framework to think about how to build for that
ideas/frameworks to borrow from
- bezos has this quote to the effect of everyone asks what do you think will be different in 5/10 years but the question to ask is what stays the same - this is what you can build a business around
- i love both frameworks of "marginal returns on intelligence" and "compressed 21st century"
in software, outside the labs or building models to compete where the labs aren't focused, there is a knife edge to walk on where you don't get eaten by the model provider and don't get so easy to build with the existing model that the enterprise does it themselves (this is before use the model for codegen) - i find most ai agent type companies to fall of this knife's edge.
two notes
- i'm thinking of baseline software commoditizing as a reaper that increases competition, lower prices but not necessarily death of business
- the knife edge is thinking about how to not be collateral damage from models - i think here it is better to compete head-on and navigate an attack vector that not thinking clearly about it and being collateral damage
even my fav ai company (non lab) - cursor with insane pmf is not obvious to me that have a durable 5-10 year business; at some point codegen is so good, the comparative advantage in writing code is gone (can be system architecture or product or design but not writing code), before this the codegen is good enough it is like reviewing a pr - ideally on the web.
i think there are some companies walking this line and sure some will make it out but feels like a very tight line to walk. maybe composio, browserbase, … ?
tangent ramble: it doesn't as obviously feel like some traditional software companies are on such a collision course with AI.
some obviously are, just through more competition less prices - this is mostly through commoditising the ability to write that software. that being said this doesn't feel as acute as being on a collision course with the lab directly or the enterprise integrating the labs work.
examples here to explain what i mean - it doesn't look like bun or astral business is meaningfully affected (to whatever extent they had a business) but what about vercel? i could see them being fine? but also maybe dx doesn't matter in this world so they aren't? feels like stripe is fine.
expanding on what stays the same, some ideas, some concepts, some businesses
- airbnb most probably - we still probably want vacations vs uber that seems pretty dead with waymo and tesla eating their lunch, probably still been fine for a while but will whimper and taper out
- network effect business here are interesting as probably have low marginal returns to intelligence in breaking them
- stripe most probably - unless no income weird ubi, probably paying for things, maybe bridge or whatever is the agents way to pay for things
- sports - nike wouldn't really be in trouble, have had stockfish for years don't really like watching stockfish play chess
- music - think it is super important to be a shared meme, i think ai music tooling to making shared memes is interesting but not sold on the personalised music(vs very sold on personalised software)
- movies/tv - blockbusters probably the same, shared meme; netflix slop can probably be ai generated and personalised
- games - closer to movies some shared meme, some personalised.
- human connection stuff - wanting friends, love
- probably decent durable business here
- … ? should expand this list much longer
- maybe example from conversation is underwriting insurance for AI Agents
tangent: opportunity cost in a revolution
there will be many things take make $1M, $1M/year even $10M/year but in the last wave of this scale - there were the real trillion dollar market opportunities or at the very least many 100+ billion market opportunities. i think the last 10 ish years didn't have this scale of opportunities outside deep-tech go build the ai revolution
this is all to say, choosing market in a revolution is super important cause the size of the pie up for grabs in enormous - this is much where you run into the steamroller
note: i hate the stay in your lane sorta advice, find some tiny niche or crevice where the steamroller doesn't touch and beg of scraps. imo startups are about building generational iconoclast companies that disrupt industries not begging for scraps in front of a steamroller.
if you are thinking in these lines and want to chat or collaborate, find some time to chat