Big companies are not your worry in most cases. They have so much bureaucracy and internal politics that it's often cheaper for them to buy out the up-and-coming startups than it is to build in-house.
Instead, if you achieve success without much of a moat, you will be cloned by one of the "App Store mills". These are companies who employ multiple small teams (think 3-4 people), and each team is charged with cloning one of the most popular apps - they have really abbreviated development cycles, on the order of 6 weeks, and they just keep churning till they've drowned every app on the leaderboard in clones. And because they are astroturfing the whole space, they don't actually need most of these clones to be individually profitable.
Is “software startup” the right term? I understand that you might want to “use software” in the startup but surely, in the most successful startups, the thing that makes them successful is that they solve a real problem, that real people/businesses have, and are prepared to “pay” [1] you to solve for them.
If the startup is just “software for the sake of software” then I think that’s a different thing entirely. And to be fair, sometimes software for the sake of it is more like art or fun. And it’s true, sometimes something wonderful comes out of that. Sometimes. :)
[1]: Obviously “pay” can mean _very_ different things in different contexts.
Your advantage in this case, now or 10 years ago, is that this is simply not true.
If your business is "a flashlight app", yeah, eventually they'll copy it (as it happened). However they'll take an unusual long time to do that simple thing (as it also happened).
Why? Because everything at big companies is a political game, full of internal conflicts, multiple priorities, non-collaborative teams, self-interest, promotion games, and a bunch of other things not really related to build the thing in question. It very rarely has anything to do with how fast the code can be written.
If your business is good enough and becomes something more than "a piece of software", and solves a problem, becomes a brand, has great user feedback... that's not something you can "copy in no time".
Don’t worry big companies still can’t copy anything quickly, even with AI. Why? Because before they can ship a single feature, they’ll need to schedule 42 alignment meetings, debate AI-generated slide decks, and log their “strategic pivots” into an AI-curated Jira board.
The real moat isn’t just code it’s speed, focus, user trust, and the ability to actually ship. Those are things bloated orgs struggle with, with or without AI. If you’re solving a real problem and building a real brand, you’re already ahead.
If, knowing what you know now, you could go back and time and be the one to create Slack would you not do it?
The only thing that has changed is the apparent ability to develop a competitor faster thanks to LLMs, but as the parent points out, the bottleneck was never code writing. It was waiting on stakeholders to get past their egos. LLMs have done nothing to resolve the latter.
I couldn’t agree more. In fact I think the exact opposite of the original statement might be true: Find a product made by a big corporation that is a great concept but has clearly suffered from an internal shitshow of a team for some time, and copy it. If other corporations are sloppily copying it - even better. That just means the product has actual market fit.
> Considering there is very little moat left in software and big companies can copy your product in no time?
Whenever you have doubts about your ability to do something enough to ask for advice from random people you don’t know, and if that thing is unnecessary and will be significantly difficult, like a startup that is just some option for you to work on, the answer is probably no.
> Considering there is very little moat left in software and big companies can copy your product in no time?
Your task in a software startup (or any startup) is to produce the moat. If you can create something with little effort in a few weeks or months then so can anyone else.
If your product does something hard or useful that you know how to do because you understand the audience or business, or includes data or knowledge that others may not know about or have, or just you can put the effort in to great service to build a large customer base it becomes harder to be copied.
Yes, big companies can copy your product. But at what cost, especially when including opportunity cost and the levels of bureaucracy in larger companies? I have heard your question many times during the last 20 years, and still there are more software startups.
In many cases it would cost them less to buy your company than to create it from scratch. Which is why so many small companies are acquired instead of copied. The question should be more what do you want to do and are you able to follow up on creating a startup? Writing the code is a small part of creating a successful startup
Remember that Mark Zuckerberg has had “AGI” for over a decade in the form of tens of thousands of human software engineers and Facebook still has barely been able to create a new successful product on their own without acquiring it from a smaller company.
> Mark Zuckerberg has had “AGI” for over a decade in the form of tens of thousands of human software engineers
This makes me think that companies like Open AI, Anthropic etc are simply new types of body shoppers. body shoppers don’t have their own products they just supply talent to help other companies make products and services.
Lots of talented people, and decent hardware, once the stupid politics was overcome.
But.
In all the time I worked there, we never managed to get "join my friends" feature get made. Trying to join your friends in a game was so fucking hard. You'd think being a social company, who's whole point is connecting people, this would be the first feature.
But no.
Threads is the only product they have launched in the last 5 years that anything close to successful. Even then it only launched because management ignored it, let them get an MVP out the door before swelling the size of the team from ~8(?) to >>2k
The time to fun was also waaay too high. it got better towards the end, but in 2020-2023 it would take ages to log in, update, load, get kicked out, reboot and then join.
A software startup has always, always been a longshot. This is still true. Also, vanishingly few companies of any kind, including software, ever get a "moat". Small companies survive, when they do, by being fast moving enough to keep making new things.
You certainly should not start a software startup to get rich, as that was never the most likely outcome. You should start one if you have an idea for software that isn't out there, which you think people would find useful, and you want to see what it's like to do a startup (enough to give it several years of your life).
I have, btw, never founded a software startup, though I have worked at some. I got paid in salary, not equity. It is now, always was, and probably always will be a longshot.
I spent the past 6 months rebuilding a medium-size company’s CRM.
They were on Salesforce for a decade, and now they’ll own their data based on the work of a single engineer.
For Salesforce, the moat is increasingly the inertia that comes from big-company contracts and the perceived safety of buying Salesforce.
Society is experiencing the first wave of the true Cambrian explosion of software and there’s never been a better time to be an indie maker. Never. This is like the iOS App Store moment, but multiplied by 100 and expected to last 10x longer.
Yes! All startups are created to solve a problem, regardless of the tools used. Apps are simply tools to solve human problems. Because humans will always have challenges to address, software will remain a vital tool. While AI makes writing software much easier. It's likely to lead to an explosion of new apps. Only those that fill a genuine need will survive. Your job is to identify these new problems and determine which apps to build.
Simple apps are a thing of the past. If an LLM can generate an app in a few sittings, it isn't a saleable product. However, people will still pay for a fully engineered application that solves a complex problem that AI cannot easily replicate.
Regarding copies, there is always room for more than one solution to the same need. Your challenge is to figure out how to stand out. A fundamental business hurdle, that has existed since the beginning.
Here's an idea that always bear's fruit. We humans love to do things as easy as possible. Write something that saves energy, time and is simple then people will pay for it.
And most of the time that problem is “the founders don’t have as much money as they want”.
> Apps are simply tools to solve human problems. Because humans will always have challenges to address, software will remain a vital tool.
You make it sound like it’s something noble, but let’s not pretend most software companies these days don’t have “make me rich” as the top goal. Effectively everything VC backed (yes, including by Y Combinator) falls in that category. That’s why pivots are a thing. Most founders these days don’t give a shit about what they’re building or customers, they only care about the payoff.
That's a cynical take, but a more positive interpretation is that pivots are needed if your company isn't actually solving a problem. Otherwise people would pay for it, and the founders would be getting rich. So you need to pivot until you actually create a solution to a problem that people will pay for.
One that you apparently agree with, given the rest of your comment.
> you need to pivot until you actually create a solution to a problem that people will pay for.
In other words: You don’t care about the problem, you care about the profit from selling a solution.
If a startup is “created to solve a problem” and then pivots to solve a different problem because the first one wasn’t profitable, that means profit was the priority, not solving the problem.
There is a chasm of difference between “I care about this problem and want to solve it, but I also need to think how to make it sustainable” and “I don’t really care what I’m tackling, as long as I make bank”.
I would expect it to be obvious that caring about making money above fixing a problem means the problem won’t be solved that well compared to the alternative.
Are you really going to claim you never encountered a startup that is obviously shitting on customers and degrading the experience to make a buck? If that is the case, search the term “enshittification”. Surely you’ll have encountered it by now. Pick whatever example helps you understand the point.
This is why I like using mathematical or algorithmic approaches to solve difficult problems. Writing programs that use statistics, mathematics, optimization, analytical geometry, etc guarantee a certain level of security from the swarms of CRUD merchants flooding the market.
That's always been the case, in software and elsewhere.
Yet, Ford didn't copy Tesla, why not?
Checkout https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma but overall the idea is that large corporations have totally different goals and incentive than startups. Also check https://steveblank.com and his startup owner manual trying to clarify that a startup is NOT a small company, rather it's searching for a product/market fit.
So is it worth pursuing a (software) startup?
Honestly if you want to make money, no. It's much easier to work for a large corporation (big economical benefits) or a public institution (work safety). You might not get ridiculously rich either way but you will be safer than most.
If you want to make a ridiculous amount of money though, well you might have to make sacrifices you are underestimating. I don't want to promote the grind culture but checkout Silicon Valley, the TV show, in particular when they discuss VC and promises done. Basically if you ask for a very high valuation you have to deliver on those claims and obviously they investors are going to keep you accountable on that. You might have to work more than you wanted (which might make the whole process a nightmare more than a joy) but more dangerously you might lose the very raison d'etre of the company you founded. If it's "just" about making money, you won't care, if you have a genuine mission, those compromises are going to eat you alive.
So... is it "worth it" very much depend on who you are, who you want to be and how saturated the market is.
I wouldn't worry about the big corporations, I would worry about what you can actually deliver and how not being able to do so will change you along the way.
There was never a statistical “advantage”, you just never heard about the 9/10 outright failures or even the parts of the 1/10 where people are toiling in obscurity and would have been better off financially “grinding leetcode and working for a FAANG” ((c) r/cscareerquestions) or even being an enterprise dev in a tier 2 city.
Maybe. great businesses don't need moats. They just need sonething people buy from them. Maybe venture capital needs moats - but you can get rich without that. (If rich is even the goal - a nice life is a better goal)
beware of any business where there is no competition - there is generally good reason nobody else is making money there.
In my experience (enterprise software), customers buy our products not because we have a moat or some hard-to-achieve technical advantage but because they can speak to us in their words, they know we care, and we try solve their problems quickly.
Just yesterday I was speaking with the COO of a $200M/yr revenue company in the supply chain space. He'd learned Claude Code and built a couple apps to solve internal problems but reached out to talk to us. I asked him "you've been able to build some really impressive tools, clearly you can solve your own problems, why are you talking to me?" And he said "I have a business to run. I shouldn't be coding. I need somebody who understands my business & can solve my problems without taking a lot of my time."
Is there a cheaper way for him to solve his problems? Absolutely. But he wants to put the key in the ignition and know the car will turn on every time without thinking about it. There is an endless list of problems to solve; I don't think software businesses are going anywhere anytime soon.
This should be the top comment. The thing about growth of businesses overall, is that they want outsourced capacity (that’s what employees or contractors are) and that dynamic doesn’t go away because of AI, because like the comment mentioned, it’s not reliable enough in the sense that it can accept high-context vague instructions and ‘figure it out’ like an enterprise developer can.
I even dream of build tools for business to make apps (like Air table, but better) and even if you can do anything that do, perfectly, the software they need not means they want to babysit it all the time.
Is like the person that knows how cook, amazingly, yet hire a chef for take care of it most days.
Obviously a COO shouldnt be prompting Claude Code but your competition is someone in their team doing the same. The person in their team is trusted and knows the business.
> Considering there is very little moat left in software and big companies can copy your product in no time?
Having worked in the corporate world all my working life I can safely say with confidence that big companies absolutely DO NOT move fast. Do not underestimate the power of middle-management to destroy momentum!
Solve a problem for someone and if it was a painful one, they'll pay you for it.
An interesting paper in this context is "Structural Inertia and Organizational Change" by Hannan and Freeman, 1984 [1]. A quote from the introduction: "...selection processes tend to favor organizations whose structures are difficult to change.".
In other words, it's typically a good thing that larger companies are slow to adapt. That's something that startups can make use of.
It is. Big companies (or really anyone) usually don't have the time to copy an idea unless it becomes too big already. And if your idea becomes too big, it was worth pursuing it.
Or worth buying up. Which in many cases was the "purpose" of doing the startup in the first place.
Sure, we'd all like to think that the goal was an idealistic "startup does things for bettering humankind".
But let's face it: A large amount of startups are literally founded as an "easier" alternative of building a "more agile" sub-organization within an established and more process driven org and then just get bought out by some of those larger orgs.
Whether or not those large orgs are then actually successful in integration and actually properly leveraging what they bought vs. just "crushing competition", is not necessarily the concern of the founders, depending on how ruthless vs. idealistic they are.
Since the majority of our industry is still in a combination denial/disbelief and bureaucratic incompatibility with AI workflows, startups are increasingly well positioned to reap the rewards.
The way I think about it is, everyone is struggling to make AI tools work well, so if you can be in the top 50% of people trying, you're actually in the top 10% in terms of positioning for future growth.
Yes! Coding is just one of the tasks you've got to do when building a software business. You also have to find a good value preposition, identify a good channel to your customers, manage your resources etc.
Channels are becoming even more important as software has become easy to copy. But copycats always existed. When it wasn't created by AI, it was created in low wage countries.
I’ve recently realized that behind each copycat, there is an entrepreneur. It’s not a big factory with written “Leading #1 in piracy” at the front. It’s someone with almost as many skills as the original entrepreneurs, trying to copy a few of them to see where there is traction, with hopes and dreams similar to the original, but too far away from the world’s center of activity to propose something relevant. Some of them probably do it with the “I can do it better than them” mindset.
"Current business conditions or issues" -- I think that's because OP wants you to fill that in yourself, so that you might explain your assumptions or the market potential that you see, which might be wildly different from his (i.e. software having little to no moat)
Thought this would be a thread about the crazy offers being handed out to join AI teams at Amazon, Meta, Google, OpenAI, Anthropic, Apple, or any of the massively capitalized 'neolabs'.
in the valley at least its difficult to pursue that unless you’re in a “hot” field. A few years ago, it was cloud, then big data, then crypto and now AI. When startups in those fields can raise hundreds of millions, they can lure away a lot of talent (both tech and non tech).
Nah. Regardless of where the company is nominally headquartered there are always an effectively infinite number of employees who can be hired to work remotely or out of satellite offices.
Is it still worth pursuing a software startup ... using the same strategies/approach/mindset/tools/means/methods of yesteryears?
Answer is Yes for the first part and No for the second part.
Problems which need software solutions and/or have a software component (at this point, practically everything) still exist in plenty. AI/ML has only changed the playing field drastically. It cannot understand the intent behind the problem which is a uniquely Human Dilemma. This is where the opportunities lie; understanding different Problem/Business Domains by studying and closely interacting with possible clients and coming up with tailored solutions whether domain-specific or client-specific.
The emphasis now is on better problem understanding/specification/verification (DSLs/notations/diagrams etc.) and faster iteration to a MVP. AI/ML is a great help here but the cycle is initiated by a Human who is always in the loop and steers it on the right trajectory in the state space of possible solutions.
The fact that people look to start a business based on searching foe a moat shows they don't believe in free markets. As well as shows what's wrong with Silicon Valley.
I'd argue the question was wrong, it's not that big companies can copy you easier now. They could have always invaded your space and destroyed your business. As other pointed out it was always picking up the pennies that they didn't want until those pennies became dollars.
The concern now is that other small team or solo developers can rebuild what you have very quickly. This happened in the mobile space with all the decompiled and repacked (with min changes) apps that showed up in the stores.
The moat for SaaS startups was that the code is hidden. Now that matters less because people use AI to try and reverse engineer your backend from the API or even UI screenshots.
You have to pick up the pace to keep ahead of them and make sure you don't cause problems for customers while doing it.
The value cannot be just the software. E.g. some workflow tool (Salesforce). These tools will continue to exist for awhile but any customer capable of moving off of it to a startup version, can probably make their own startup version, tailored to them.
Now, if you offer something besides the software — logistics, networks, financial instruments, regulatory compliance, physical goods, compute, etc — that has value besides the software.
But the five billionth workflow automation tool has fast diminishing value in 2026.
This is the problem with big concentration of wealth and power. The big tech mega corps can copy your idea easily because they don’t have any budget, they can undercut you or sell at a loss, and they can distribute it to all their current customers with anti competitive bundling.
It has happened over and over many times and American antitrust law is useless. The largest corporations must be broken up, taxed heavily, and regulated in new ways. Otherwise there is no fair competition or level playing field for startups.
I would strongly recommend staying away from software startups unless:
- The CEO of some major corporation or a big VC is a close friend or friend of your family.
- You are rich and have a lot of friends who will buy your product.
- You already finished the MVP; which you started building 12 years ago... Might as well try to complete.
- You're a criminal.
The market is insanely saturated and people already have more stuff than they need. Capitalism has been over since 2008. Now it's just feudalism. Product is irrelevant; it's all a social game of selection. You have to be selected. You just need to know someone and have a product with a semi-reasonable narrative that your CEO buddy can use as a justification to give you company money. That's it.
I disagree with the sour mindset, as I don’t feel those games were necessary for my startup, although I admit mine was bootstrapped (0$), and didn’t grow as far as the others, it still made me millionaire, has paid my employees a high-than-average salary and has the potential of adding them a few hundred thousands each.
I admit the old market (do web apps to manage records! or notes!) is saturated but the IA market is brand new and fresh open.
Depends on your goal - do you have an idea you care about and want to solve? Probably a good idea. If you "want to be your own boss" or looking for something just to be acquired, hard to say, depends on who you know, etc.
You're gonna get a lot of positive responses here, but frankly only do it if you think you can make meaningful money within a month or two.
Everything is going off the rails this year. You only have to use Claude Code for 10 minutes to realize every job involving a computer is going to get flipped upside down within a year.
Lol that's what they told us last year. And they'll say the same thing next year. It's obviously useful for certain tasks but the number of errors and hallucinations are still quite bad for anything large or complex or really novel. That part is improving very slowly and some fundamental theoretical breakthroughs will be needed.
Have you actually had it do anything substantial and then tried to work with the code it produces afterwards? It may "work" but it's a horrific mess. Good luck bug fixing that.
Yes, with GPT 5.2 Codex and 5.2 Pro specifically. It’s not a mess because of the context I provide and the guidance and reattempts I apply. It’s working great, the resulting code is good when I accept it, and I’m getting much more done than in the before times.
I am just as bullish as you on the potential. AI is going to change the world all right. Much bigger than the internet.
I an far, far less bullish than you on the timeframe. The vast amount of work is not even optimised for computers without AI. Much if not most bureaucratic process has stayed mostly the same for the best part of a hundred years.
It will change everything, but not in a single year!
+1. Claude is actually really good at all kinds of development but Claude will still make plenty of mistakes and occasionally go so far in the wrong direction that it still needs someone with experience to steer it.
Got to get more creative and less funding dependent. People still seem caught up in the old process of ideation, static creation, pitch decks. Ack! Garbage now! I only ever took funding to scale to 3-5 heads, well I have 20 heads for nearly nothing now... Ive created more "startup" ideas in the last 3 years then the last 20 of my career. I just keep cranking out anything remotely interesting, launch, and if it don't "work", move on. I just launched another one this week, feels most promising, but we'll see... I didn't go quitting my day job just yet.
Also, GTFO! My ideas are not just slop from sitting around day dreaming. Every one is from observations made from talking or watching people struggle... cant replace that with AI yet.
You mean the big companies who still haven't moved away from abominations like SAP and Oracle? The ones where you require twenty approvals to get a small pilot done? Instead of moving to saner and cheaper alternatives, they would just say, "hey, why don't we just start making our own software?" Every effort like this—if it had any takers—will fail spectacularly.
I get it people are skeptical about the future. But I can't imagine any scenario where people would like taking responsibility of building and mantaining their own software for everything vs. paying marginal amount of money (relatively speaking) to let someone else take the headache.
I can imagine a future where it will be possible for a family to host their own essential services ... There got to be something between homelabs and cloud services bc the gap is too big.
Not quite there yet but Yunohost is a fantastic attempt to get closer to this ideal. Install the OS - and the basic self-hostic-use-case apps are all just there to click and install. From Immich to Kodi to Wordpress and what not.
With IPv6 (and/or NAT-forwarding) it was already possible to host stuff.
However, E-mail's horrible protocols and spam-blocking security monopolies mean you're stuck with one of the big cloud providers, even if you could automate/solve e-mail server complications.
Good luck. To have something that a regular family could use would require remote access from the company for troubleshooting, updates, maintenance.
So you get all of the downsides of cloud hosting (company employees can still remote in), with none of the upsides (all the hardware is now geographically distributed, instead of one big building) with the privilege of paying for it instead of being "free" like facebook/google.
Could it be that it's just a wrapper for APIs like OpenAI/Anthropic? I've been thinking about this for a long time, and I'm surprised to find someone else with the same view.
Big companies are not your worry in most cases. They have so much bureaucracy and internal politics that it's often cheaper for them to buy out the up-and-coming startups than it is to build in-house.
Instead, if you achieve success without much of a moat, you will be cloned by one of the "App Store mills". These are companies who employ multiple small teams (think 3-4 people), and each team is charged with cloning one of the most popular apps - they have really abbreviated development cycles, on the order of 6 weeks, and they just keep churning till they've drowned every app on the leaderboard in clones. And because they are astroturfing the whole space, they don't actually need most of these clones to be individually profitable.
Is “software startup” the right term? I understand that you might want to “use software” in the startup but surely, in the most successful startups, the thing that makes them successful is that they solve a real problem, that real people/businesses have, and are prepared to “pay” [1] you to solve for them.
If the startup is just “software for the sake of software” then I think that’s a different thing entirely. And to be fair, sometimes software for the sake of it is more like art or fun. And it’s true, sometimes something wonderful comes out of that. Sometimes. :)
[1]: Obviously “pay” can mean _very_ different things in different contexts.
> Big companies can copy your product in no time
Your advantage in this case, now or 10 years ago, is that this is simply not true.
If your business is "a flashlight app", yeah, eventually they'll copy it (as it happened). However they'll take an unusual long time to do that simple thing (as it also happened).
Why? Because everything at big companies is a political game, full of internal conflicts, multiple priorities, non-collaborative teams, self-interest, promotion games, and a bunch of other things not really related to build the thing in question. It very rarely has anything to do with how fast the code can be written.
If your business is good enough and becomes something more than "a piece of software", and solves a problem, becomes a brand, has great user feedback... that's not something you can "copy in no time".
Don’t worry big companies still can’t copy anything quickly, even with AI. Why? Because before they can ship a single feature, they’ll need to schedule 42 alignment meetings, debate AI-generated slide decks, and log their “strategic pivots” into an AI-curated Jira board.
The real moat isn’t just code it’s speed, focus, user trust, and the ability to actually ship. Those are things bloated orgs struggle with, with or without AI. If you’re solving a real problem and building a real brand, you’re already ahead.
The real moat is not being forced to use Jira then.
In a previous big-tech job, we called this the "Release Prevention Team".
While I agree with sone of your points, there are many evidences that this happened in the past.
One example is Microsoft creating teams to take on Slack.
If, knowing what you know now, you could go back and time and be the one to create Slack would you not do it?
The only thing that has changed is the apparent ability to develop a competitor faster thanks to LLMs, but as the parent points out, the bottleneck was never code writing. It was waiting on stakeholders to get past their egos. LLMs have done nothing to resolve the latter.
I dont think the founders or early team at slack are upset with how things played out
Teams is still nowhere near Slack's features and usefulness. I wouldn't say it's a direct competitor, it's like store brand vs a mid-luxury item
I couldn’t agree more. In fact I think the exact opposite of the original statement might be true: Find a product made by a big corporation that is a great concept but has clearly suffered from an internal shitshow of a team for some time, and copy it. If other corporations are sloppily copying it - even better. That just means the product has actual market fit.
What about other smart guys looking for ideas for their startup?
> Considering there is very little moat left in software and big companies can copy your product in no time?
Whenever you have doubts about your ability to do something enough to ask for advice from random people you don’t know, and if that thing is unnecessary and will be significantly difficult, like a startup that is just some option for you to work on, the answer is probably no.
> Considering there is very little moat left in software and big companies can copy your product in no time?
Your task in a software startup (or any startup) is to produce the moat. If you can create something with little effort in a few weeks or months then so can anyone else.
If your product does something hard or useful that you know how to do because you understand the audience or business, or includes data or knowledge that others may not know about or have, or just you can put the effort in to great service to build a large customer base it becomes harder to be copied.
Yes, big companies can copy your product. But at what cost, especially when including opportunity cost and the levels of bureaucracy in larger companies? I have heard your question many times during the last 20 years, and still there are more software startups.
In many cases it would cost them less to buy your company than to create it from scratch. Which is why so many small companies are acquired instead of copied. The question should be more what do you want to do and are you able to follow up on creating a startup? Writing the code is a small part of creating a successful startup
It’s still hard to create something successful.
Remember that Mark Zuckerberg has had “AGI” for over a decade in the form of tens of thousands of human software engineers and Facebook still has barely been able to create a new successful product on their own without acquiring it from a smaller company.
> Mark Zuckerberg has had “AGI” for over a decade in the form of tens of thousands of human software engineers
This makes me think that companies like Open AI, Anthropic etc are simply new types of body shoppers. body shoppers don’t have their own products they just supply talent to help other companies make products and services.
Mechanical Turk at scale.
Facebook cannot make products, its that simple.
Oculus?
I worked for oculus, well reality labs.
Lots of talented people, and decent hardware, once the stupid politics was overcome.
But.
In all the time I worked there, we never managed to get "join my friends" feature get made. Trying to join your friends in a game was so fucking hard. You'd think being a social company, who's whole point is connecting people, this would be the first feature.
But no.
Threads is the only product they have launched in the last 5 years that anything close to successful. Even then it only launched because management ignored it, let them get an MVP out the door before swelling the size of the team from ~8(?) to >>2k The time to fun was also waaay too high. it got better towards the end, but in 2020-2023 it would take ages to log in, update, load, get kicked out, reboot and then join.
Did they make though or did they buy? What did they actually buy that wasn't already done at Valve?
That division is losing billions a year. I wouldn’t call it a success
Acquired
A software startup has always, always been a longshot. This is still true. Also, vanishingly few companies of any kind, including software, ever get a "moat". Small companies survive, when they do, by being fast moving enough to keep making new things.
You certainly should not start a software startup to get rich, as that was never the most likely outcome. You should start one if you have an idea for software that isn't out there, which you think people would find useful, and you want to see what it's like to do a startup (enough to give it several years of your life).
I have, btw, never founded a software startup, though I have worked at some. I got paid in salary, not equity. It is now, always was, and probably always will be a longshot.
The opposite is increasingly true…
I spent the past 6 months rebuilding a medium-size company’s CRM.
They were on Salesforce for a decade, and now they’ll own their data based on the work of a single engineer.
For Salesforce, the moat is increasingly the inertia that comes from big-company contracts and the perceived safety of buying Salesforce.
Society is experiencing the first wave of the true Cambrian explosion of software and there’s never been a better time to be an indie maker. Never. This is like the iOS App Store moment, but multiplied by 100 and expected to last 10x longer.
Yes, otherwise there wouldn't be billions of dollars flowing into seed rounds every year to make novel products.
Not sure why you think a large company can copy a product in no time, they have to steer a cargo ship, you have a speed boat.
Yes! All startups are created to solve a problem, regardless of the tools used. Apps are simply tools to solve human problems. Because humans will always have challenges to address, software will remain a vital tool. While AI makes writing software much easier. It's likely to lead to an explosion of new apps. Only those that fill a genuine need will survive. Your job is to identify these new problems and determine which apps to build.
Simple apps are a thing of the past. If an LLM can generate an app in a few sittings, it isn't a saleable product. However, people will still pay for a fully engineered application that solves a complex problem that AI cannot easily replicate.
Regarding copies, there is always room for more than one solution to the same need. Your challenge is to figure out how to stand out. A fundamental business hurdle, that has existed since the beginning.
Here's an idea that always bear's fruit. We humans love to do things as easy as possible. Write something that saves energy, time and is simple then people will pay for it.
> All startups are created to solve a problem
And most of the time that problem is “the founders don’t have as much money as they want”.
> Apps are simply tools to solve human problems. Because humans will always have challenges to address, software will remain a vital tool.
You make it sound like it’s something noble, but let’s not pretend most software companies these days don’t have “make me rich” as the top goal. Effectively everything VC backed (yes, including by Y Combinator) falls in that category. That’s why pivots are a thing. Most founders these days don’t give a shit about what they’re building or customers, they only care about the payoff.
That's a cynical take, but a more positive interpretation is that pivots are needed if your company isn't actually solving a problem. Otherwise people would pay for it, and the founders would be getting rich. So you need to pivot until you actually create a solution to a problem that people will pay for.
> That's a cynical take
One that you apparently agree with, given the rest of your comment.
> you need to pivot until you actually create a solution to a problem that people will pay for.
In other words: You don’t care about the problem, you care about the profit from selling a solution.
If a startup is “created to solve a problem” and then pivots to solve a different problem because the first one wasn’t profitable, that means profit was the priority, not solving the problem.
Of course profit is a priority how else are you going to pay the bills/employees etc?
“The”, not “a”.
There is a chasm of difference between “I care about this problem and want to solve it, but I also need to think how to make it sustainable” and “I don’t really care what I’m tackling, as long as I make bank”.
Both exist. The second one is ever more the norm.
Why is this a problem? As long as the problem gets solved.
I would expect it to be obvious that caring about making money above fixing a problem means the problem won’t be solved that well compared to the alternative.
Are you really going to claim you never encountered a startup that is obviously shitting on customers and degrading the experience to make a buck? If that is the case, search the term “enshittification”. Surely you’ll have encountered it by now. Pick whatever example helps you understand the point.
Plus, how many of these existing apps were just databases wired up in different ways?
This is why I like using mathematical or algorithmic approaches to solve difficult problems. Writing programs that use statistics, mathematics, optimization, analytical geometry, etc guarantee a certain level of security from the swarms of CRUD merchants flooding the market.
And how many of these apps were just files wired up in different ways?
That's always been the case, in software and elsewhere.
Yet, Ford didn't copy Tesla, why not?
Checkout https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma but overall the idea is that large corporations have totally different goals and incentive than startups. Also check https://steveblank.com and his startup owner manual trying to clarify that a startup is NOT a small company, rather it's searching for a product/market fit.
So is it worth pursuing a (software) startup?
Honestly if you want to make money, no. It's much easier to work for a large corporation (big economical benefits) or a public institution (work safety). You might not get ridiculously rich either way but you will be safer than most.
If you want to make a ridiculous amount of money though, well you might have to make sacrifices you are underestimating. I don't want to promote the grind culture but checkout Silicon Valley, the TV show, in particular when they discuss VC and promises done. Basically if you ask for a very high valuation you have to deliver on those claims and obviously they investors are going to keep you accountable on that. You might have to work more than you wanted (which might make the whole process a nightmare more than a joy) but more dangerously you might lose the very raison d'etre of the company you founded. If it's "just" about making money, you won't care, if you have a genuine mission, those compromises are going to eat you alive.
So... is it "worth it" very much depend on who you are, who you want to be and how saturated the market is.
I wouldn't worry about the big corporations, I would worry about what you can actually deliver and how not being able to do so will change you along the way.
There was never a statistical “advantage”, you just never heard about the 9/10 outright failures or even the parts of the 1/10 where people are toiling in obscurity and would have been better off financially “grinding leetcode and working for a FAANG” ((c) r/cscareerquestions) or even being an enterprise dev in a tier 2 city.
Maybe. great businesses don't need moats. They just need sonething people buy from them. Maybe venture capital needs moats - but you can get rich without that. (If rich is even the goal - a nice life is a better goal)
beware of any business where there is no competition - there is generally good reason nobody else is making money there.
In my experience (enterprise software), customers buy our products not because we have a moat or some hard-to-achieve technical advantage but because they can speak to us in their words, they know we care, and we try solve their problems quickly.
Just yesterday I was speaking with the COO of a $200M/yr revenue company in the supply chain space. He'd learned Claude Code and built a couple apps to solve internal problems but reached out to talk to us. I asked him "you've been able to build some really impressive tools, clearly you can solve your own problems, why are you talking to me?" And he said "I have a business to run. I shouldn't be coding. I need somebody who understands my business & can solve my problems without taking a lot of my time."
Is there a cheaper way for him to solve his problems? Absolutely. But he wants to put the key in the ignition and know the car will turn on every time without thinking about it. There is an endless list of problems to solve; I don't think software businesses are going anywhere anytime soon.
This should be the top comment. The thing about growth of businesses overall, is that they want outsourced capacity (that’s what employees or contractors are) and that dynamic doesn’t go away because of AI, because like the comment mentioned, it’s not reliable enough in the sense that it can accept high-context vague instructions and ‘figure it out’ like an enterprise developer can.
One of the better, more levelheaded responses here.
A PM I've worked with many times always used to say, "They want an easy button! It's that simple!."
Yeah, this is how we survive.
I even dream of build tools for business to make apps (like Air table, but better) and even if you can do anything that do, perfectly, the software they need not means they want to babysit it all the time.
Is like the person that knows how cook, amazingly, yet hire a chef for take care of it most days.
Obviously a COO shouldnt be prompting Claude Code but your competition is someone in their team doing the same. The person in their team is trusted and knows the business.
Or maybe COO was using it for leverage
Sometimes, software that 2 devs make in a year, takes same 2 years for 5 teams of 10.
> Considering there is very little moat left in software and big companies can copy your product in no time?
Having worked in the corporate world all my working life I can safely say with confidence that big companies absolutely DO NOT move fast. Do not underestimate the power of middle-management to destroy momentum!
Solve a problem for someone and if it was a painful one, they'll pay you for it.
An interesting paper in this context is "Structural Inertia and Organizational Change" by Hannan and Freeman, 1984 [1]. A quote from the introduction: "...selection processes tend to favor organizations whose structures are difficult to change.".
In other words, it's typically a good thing that larger companies are slow to adapt. That's something that startups can make use of.
[1] https://www.jstor.org/stable/2095567
It is. Big companies (or really anyone) usually don't have the time to copy an idea unless it becomes too big already. And if your idea becomes too big, it was worth pursuing it.
Or worth buying up. Which in many cases was the "purpose" of doing the startup in the first place.
Sure, we'd all like to think that the goal was an idealistic "startup does things for bettering humankind".
But let's face it: A large amount of startups are literally founded as an "easier" alternative of building a "more agile" sub-organization within an established and more process driven org and then just get bought out by some of those larger orgs.
Whether or not those large orgs are then actually successful in integration and actually properly leveraging what they bought vs. just "crushing competition", is not necessarily the concern of the founders, depending on how ruthless vs. idealistic they are.
if you have to ask the answer is no.
if you are young there’s still hope that you can change your mindset and approach though.
if software can save time and make money than human capital then there will be demand.
Since the majority of our industry is still in a combination denial/disbelief and bureaucratic incompatibility with AI workflows, startups are increasingly well positioned to reap the rewards.
The way I think about it is, everyone is struggling to make AI tools work well, so if you can be in the top 50% of people trying, you're actually in the top 10% in terms of positioning for future growth.
Yes! Coding is just one of the tasks you've got to do when building a software business. You also have to find a good value preposition, identify a good channel to your customers, manage your resources etc.
Channels are becoming even more important as software has become easy to copy. But copycats always existed. When it wasn't created by AI, it was created in low wage countries.
I’ve recently realized that behind each copycat, there is an entrepreneur. It’s not a big factory with written “Leading #1 in piracy” at the front. It’s someone with almost as many skills as the original entrepreneurs, trying to copy a few of them to see where there is traction, with hopes and dreams similar to the original, but too far away from the world’s center of activity to propose something relevant. Some of them probably do it with the “I can do it better than them” mindset.
So long as it's not about AI. The world hasn't run out of problems that could be solved or improved by software.
Do it if you want to - if you feel some burning desire to create that thing and you just can't get it out of your head.
You're asking what's a defensible value-add, but without really framing current business conditions or issues.
Time - opportunity - matters a lot, perhaps more than anything. And to face that, one needs to ask better questions (even if you're just polling).
"Current business conditions or issues" -- I think that's because OP wants you to fill that in yourself, so that you might explain your assumptions or the market potential that you see, which might be wildly different from his (i.e. software having little to no moat)
Thought this would be a thread about the crazy offers being handed out to join AI teams at Amazon, Meta, Google, OpenAI, Anthropic, Apple, or any of the massively capitalized 'neolabs'.
in the valley at least its difficult to pursue that unless you’re in a “hot” field. A few years ago, it was cloud, then big data, then crypto and now AI. When startups in those fields can raise hundreds of millions, they can lure away a lot of talent (both tech and non tech).
Nah. Regardless of where the company is nominally headquartered there are always an effectively infinite number of employees who can be hired to work remotely or out of satellite offices.
The real question to ask is;
Is it still worth pursuing a software startup ... using the same strategies/approach/mindset/tools/means/methods of yesteryears?
Answer is Yes for the first part and No for the second part.
Problems which need software solutions and/or have a software component (at this point, practically everything) still exist in plenty. AI/ML has only changed the playing field drastically. It cannot understand the intent behind the problem which is a uniquely Human Dilemma. This is where the opportunities lie; understanding different Problem/Business Domains by studying and closely interacting with possible clients and coming up with tailored solutions whether domain-specific or client-specific.
The emphasis now is on better problem understanding/specification/verification (DSLs/notations/diagrams etc.) and faster iteration to a MVP. AI/ML is a great help here but the cycle is initiated by a Human who is always in the loop and steers it on the right trajectory in the state space of possible solutions.
The fact that people look to start a business based on searching foe a moat shows they don't believe in free markets. As well as shows what's wrong with Silicon Valley.
Yeah, and a moat can just be a solid trusted brand. Claude Code can't take that away.
You could probably become rich wholesaling gravel in your city. There are plenty of opportunities all around. Execution is key.
Build something novel, what has changed?
I'd argue the question was wrong, it's not that big companies can copy you easier now. They could have always invaded your space and destroyed your business. As other pointed out it was always picking up the pennies that they didn't want until those pennies became dollars.
The concern now is that other small team or solo developers can rebuild what you have very quickly. This happened in the mobile space with all the decompiled and repacked (with min changes) apps that showed up in the stores.
The moat for SaaS startups was that the code is hidden. Now that matters less because people use AI to try and reverse engineer your backend from the API or even UI screenshots.
You have to pick up the pace to keep ahead of them and make sure you don't cause problems for customers while doing it.
The serious answer:
The value cannot be just the software. E.g. some workflow tool (Salesforce). These tools will continue to exist for awhile but any customer capable of moving off of it to a startup version, can probably make their own startup version, tailored to them.
Now, if you offer something besides the software — logistics, networks, financial instruments, regulatory compliance, physical goods, compute, etc — that has value besides the software.
But the five billionth workflow automation tool has fast diminishing value in 2026.
This is the problem with big concentration of wealth and power. The big tech mega corps can copy your idea easily because they don’t have any budget, they can undercut you or sell at a loss, and they can distribute it to all their current customers with anti competitive bundling.
It has happened over and over many times and American antitrust law is useless. The largest corporations must be broken up, taxed heavily, and regulated in new ways. Otherwise there is no fair competition or level playing field for startups.
I would strongly recommend staying away from software startups unless:
- The CEO of some major corporation or a big VC is a close friend or friend of your family.
- You are rich and have a lot of friends who will buy your product.
- You already finished the MVP; which you started building 12 years ago... Might as well try to complete.
- You're a criminal.
The market is insanely saturated and people already have more stuff than they need. Capitalism has been over since 2008. Now it's just feudalism. Product is irrelevant; it's all a social game of selection. You have to be selected. You just need to know someone and have a product with a semi-reasonable narrative that your CEO buddy can use as a justification to give you company money. That's it.
You’re talking about VC startups.
I disagree with the sour mindset, as I don’t feel those games were necessary for my startup, although I admit mine was bootstrapped (0$), and didn’t grow as far as the others, it still made me millionaire, has paid my employees a high-than-average salary and has the potential of adding them a few hundred thousands each.
I admit the old market (do web apps to manage records! or notes!) is saturated but the IA market is brand new and fresh open.
Isn't it the opposite? E.g. there is very little moat left and small companies or individuals can copy any product big or small in no time?
Depends on your goal - do you have an idea you care about and want to solve? Probably a good idea. If you "want to be your own boss" or looking for something just to be acquired, hard to say, depends on who you know, etc.
You're gonna get a lot of positive responses here, but frankly only do it if you think you can make meaningful money within a month or two.
Everything is going off the rails this year. You only have to use Claude Code for 10 minutes to realize every job involving a computer is going to get flipped upside down within a year.
Lol that's what they told us last year. And they'll say the same thing next year. It's obviously useful for certain tasks but the number of errors and hallucinations are still quite bad for anything large or complex or really novel. That part is improving very slowly and some fundamental theoretical breakthroughs will be needed.
I don't care what they told you last year, I didn't say jack shit. I'm saying it now.
Cope or pretend it's not happening, I don't care, this is the year.
Have you actually had it do anything substantial and then tried to work with the code it produces afterwards? It may "work" but it's a horrific mess. Good luck bug fixing that.
Yes, with GPT 5.2 Codex and 5.2 Pro specifically. It’s not a mess because of the context I provide and the guidance and reattempts I apply. It’s working great, the resulting code is good when I accept it, and I’m getting much more done than in the before times.
Yes, Opus 4.5 is not business as normal. If you haven't tried it, you really need to, to update your opinion.
I am talking about opus 4.5. It made a complete mess out of my project.
That's what it does. Switch to Codex (not someone else's harness) with 5.2 Codex XHigh
I am just as bullish as you on the potential. AI is going to change the world all right. Much bigger than the internet.
I an far, far less bullish than you on the timeframe. The vast amount of work is not even optimised for computers without AI. Much if not most bureaucratic process has stayed mostly the same for the best part of a hundred years.
It will change everything, but not in a single year!
Claude Code is useless for anything that requires advanced knowledge.
+1. Claude is actually really good at all kinds of development but Claude will still make plenty of mistakes and occasionally go so far in the wrong direction that it still needs someone with experience to steer it.
Got to get more creative and less funding dependent. People still seem caught up in the old process of ideation, static creation, pitch decks. Ack! Garbage now! I only ever took funding to scale to 3-5 heads, well I have 20 heads for nearly nothing now... Ive created more "startup" ideas in the last 3 years then the last 20 of my career. I just keep cranking out anything remotely interesting, launch, and if it don't "work", move on. I just launched another one this week, feels most promising, but we'll see... I didn't go quitting my day job just yet.
Also, GTFO! My ideas are not just slop from sitting around day dreaming. Every one is from observations made from talking or watching people struggle... cant replace that with AI yet.
You mean the big companies who still haven't moved away from abominations like SAP and Oracle? The ones where you require twenty approvals to get a small pilot done? Instead of moving to saner and cheaper alternatives, they would just say, "hey, why don't we just start making our own software?" Every effort like this—if it had any takers—will fail spectacularly.
I get it people are skeptical about the future. But I can't imagine any scenario where people would like taking responsibility of building and mantaining their own software for everything vs. paying marginal amount of money (relatively speaking) to let someone else take the headache.
I can imagine a future where it will be possible for a family to host their own essential services ... There got to be something between homelabs and cloud services bc the gap is too big.
Not quite there yet but Yunohost is a fantastic attempt to get closer to this ideal. Install the OS - and the basic self-hostic-use-case apps are all just there to click and install. From Immich to Kodi to Wordpress and what not.
https://yunohost.org/
> I can imagine a future where it will be possible for a family to host their own essential services
Exactly. Even something as seemingly mundane as hosting your own email is a major challenge.
With IPv6 (and/or NAT-forwarding) it was already possible to host stuff.
However, E-mail's horrible protocols and spam-blocking security monopolies mean you're stuck with one of the big cloud providers, even if you could automate/solve e-mail server complications.
Not true. Been hosting my own email for years and only prblem is delivery to some MS hosted services (usually hotmail)
Good luck. To have something that a regular family could use would require remote access from the company for troubleshooting, updates, maintenance.
So you get all of the downsides of cloud hosting (company employees can still remote in), with none of the upsides (all the hardware is now geographically distributed, instead of one big building) with the privilege of paying for it instead of being "free" like facebook/google.
There's still plenty of moats frankly, same moats as before. What isn't the moat is the software development time.
In our case, we're building a tool that has a moat from: integrations, multiple parties connecting, and others
It's very sticky once we get in, and has nothing to do with the software so much as legal, company policy and inter party communication
You can get the same output as $500k/year of software engineers for $2.4k/year now. Never been better if you ask me!
Could it be that it's just a wrapper for APIs like OpenAI/Anthropic? I've been thinking about this for a long time, and I'm surprised to find someone else with the same view.
The only software worth writing is tools for agents that contain something hard for them to vibe code in a couple of sessions.
Making someone’s agents 20% better, cheaper or faster will be a measurable and easy sales goal.
Unfortunately any pro-AI viewpoint, no matter how uncontroversial, will be immediately dismissed and down voted here. Doesn't make it not true.
I hope this is sarcasm…