GuShiio.com Nowadays, it may be more important than ever to think ahead about the competitive advantage after PMF.
Author: Qiao Wang, Alliance DAO Joint Venture
Compiled by: Shenchao TechFlow
Three years ago, when ChatGPT first launched, I wrote Mini programs to help me prioritize email and messages. Since my programming skills were a little rusty, I chose to use ChatGPT to assist with the coding work. At that time, I immediately felt the power of AI. This project only took me half a day, and in an era without AI, it could have taken days to complete.
Over the next few years, the technology founders we worked with at Alliance gradually began to use various AI coding tools, such as Cursor. I once asked them how much productivity these tools can improve? On average, it has increased by about 1.5 times, and some people even say it can reach twice.
Just this week, I asked the same question to the latest Alliance members. Their answers showed that the productivity increase was between 2 and 4 times. This surprised me. Not only because of the magnitude of the increase, but also because of the rapid pace of progress, productivity has increased fourfold in just three years, and this trend continues.
When I first used ChatGPT as an assistant, I vaguely felt that AI would forever change the rules of entrepreneurship. And now, I firmly believe it.
The cost of writing software is falling rapidly, almost zero. But this is only the beginning. Costs in other business areas such as marketing, sales, customer service, and operations are also being significantly reduced. This change is already evident in large companies. For startups that have not yet found a product-market fit (PMF), the impact is temporarily small, as founders need to be personally responsible for user acquisition and support in order to be closer to customers. But for startups that have found PMF, they are starting to use AI to expand their business faster.
The results of this change are obvious: Startups no longer need large amounts of money and large teams to grow rapidly. In other words, there may be more unicorn companies created by a few co-founders and less than $500,000 in funding in the future. In fact, over the past few years, we have seen more and more Alliance startups achieve millions or even tens of millions of dollars in annual revenue growth after receiving only a small amount of seed funding through us and some angel investors. Their team size is usually less than 10-20 people and may never need to be raised again.
This begs the question: If the cost of writing software and expanding a business is so low today, what moats can companies rely on to remain competitive?
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exclusive data: Unique customer data or hard-to-access public data sets can provide a competitive barrier for companies.
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network effects: While it is theoretically possible to rebuild the technical architecture of Facebook or Nasdaq, acquiring its users is not easy.
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deep integration: Enterprise software deeply embedded in workflows has higher switching costs.
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Ecosystem lock-in: Platforms with a strong developer ecosystem and third-party integration are more sticky.
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regulatory barriersAI cannot help companies obtain the licenses and relationships they need to operate in highly regulated industries such as finance, medical or defense.
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trust and brand: Consumers and organizations will still trust well-known brands more when making key decisions.
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Physical world limitations: Physical infrastructure, robotics and supply chains still have realistic constraints that AI cannot break through.
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Deep user insight: Although AI can help implement some pretty good ideas, the true understanding of user needs is not in the AI training data, but through direct communication with users.
For startups that have not yet found a PMF, finding a PMF is a top priority. But right now, thinking ahead of time about the competitive advantage after PMF may be more important than ever.
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