When tech features become a never-ending arms race, business strategy matters even more.
Shocking…I just asked hundreds of AI founders and corporate AI leaders at the GenAI Summit in Silicon Valley: “How long does a technical moat in the AI industry last?”
The most common response via hand-raising? MONTHS.
Not years, not quarters— Months, and the second most popular response was even worse: Weeks.
Sooo…. How do you build enduring leadership when the AI arms race is moving so quickly? Answer: The business strategy matters a lot.
The two business strategies that can set your company apart in a tech arms race
That’s why in our investments in AI startups, we are seeking startups that have these two business strategies (and your company should consider these, too)
- Viral effects
This comes in about three flavors: organic WOM, product led growth (PLG) and a distribution channel. The product organically spreads at low cost, results in low cost spread.
and
- Network Effects
Every new user, connected app, or new data point adds value for all other users. Results in more value at low cost, and keeps those users from viral effects loyal to you.
Startups that can combine both strategies that have a higher chance of Blitzscaling, the thesis written by Reid Hoffman and Chris Yeh.
I gave examples of companies we’ve invested in like: CrewAI (open source which is viral. and multi agent platform which results in network effects), Composio (thousands of agentic connections in one platform), Skyfire (agent payment platform) and Please AI (consumer agent for planning and completing goals).
Thanks for the opportunity to keynote the GenAISummit, hosted by GPTDAO. Photos by Michael O’Donnell.
