I send infrequent newsletters about tech , product, and poetry

Moat is Dead – Adjusting in the world of AI

As I write this, I am fighting a very strong urge to just ask ChatGPT or Bard or other generative AIs to write it for me.

Here are my early thoughts

In my 15 yrs in tech world, I have never seen so much transformative innovation hitting consumer products in so little time. It’s no longer a linear acceleration of tech, but rather an exponential leap. THIS WILL CHANGE EVERYTHING.

And this brings me to the provocative title of this post. I know its a bit alarmist, but hear me out

Typically companies had specific moats like IP, great software talent, Huge cash reserves, government regulations, users, network effects.
A lot of these were function of :Time to market and sustained lead due to better product
Better product was a function of better strategy and just talent

These things are now going away.

Now you CAN build a working product without knowing coding , imagine what you could do if you knew little coding. The difference between an average coder and excellent coder is increasing while a non coder and an average coder is shrinking rapidly.

No code tools was a good start, but what if you could code? And that’s what this new generation of tools will usher

Time to market is going to reduce drastically. Since you no longer need lots of excellent developers, the cost of building and maintaining good enough products is dropping significantly. Remember when you used to pay 14Rs/min for a mobile phone call? Now the same company offers almost unlimited calls for 5rs/day

If you build a new startup and gain slight traction, you will see good enough copies in a matter of days rather than months and years. Imagine being able to launch a clubhouse competitor the day after clubhouse launched . Imagine if twitter spaces and facebook rooms was launched hours after clubhouse got its first large meeting. The “Speed” moat is gone.
Sure everyone can develop faster but speed of thought has its upper limit.

So what could you even do? Especially if you are a startup…

  • Assume disruption is months away
  • Don’t wait to be too big to start charging. You don’t have time . Make money from get go so that you have reserve for pivots
  • For many companies, Pivots will become the way of survival …Like microsas . You keep building what is needed NOW
  • Acquire, get acquired, buy, sell , survive
  • Big generational companies will now need to build some deeply fundamental tech. New ways to do LLMs? , basic physics?, Biology, Aging.
    Building companies which are essentially wrappers on top of various other services are in trouble.
    SASS Especially is in deep trouble, its likely that soon it would be cheaper to build than to buy .

The world is getting very interesting, but also slightly scary. You will feel old soon. The generation gap you feel when you try to explain tech to your parents…Well this will be our generations generation gap






2 responses to “Moat is Dead – Adjusting in the world of AI”

  1. Nizam Avatar

    Good article!

Leave a Reply

Your email address will not be published. Required fields are marked *