Previously, you needed skills to build bigger software products. Now, with AI, pretty much anyone can build anything. The moat that software engineers and startups with great technical teams had has gone away.
What’s important now is speed and the ability to catch trends. I have seen multiple people on X talk about how there are now people who build something for new trends, profit from it for a while, and eventually, when margins disappear as others come, move on to the next thing.
It’s much harder now to build pure software that someone can’t replicate in a relatively short period of time. A lot of startups try to add human service (e.g. not just building accounting software but an accounting company) to their startups because it’s an easy way to create a moat, but in the long term, I believe AI will get better and replace the majority of this manual work destroying their moat.
The era of VC-funded startups is coming to an end. The future is in bootstrapped startups where the founders and employees get dividends from the beginning. They ship products in cycles that might be from months to years. I kind of like the idea that startup founders reject desperate VCs who want to find harbors for their money to keep LPs happy.