AI is eating startups

These days, every news story, every WhatsApp group message, every LinkedIn post, and every conversation

Seems to be about how AI is making it so much easier to be a founder.

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From the sounds of it, AI is making it easier than ever to build something -

To start something,

No coders, no cofounders, no employees needed.

But here's the problem:

It's actually poised to do the opposite.

The best argument might come from a story heard in my first ever strategy class,

One of those foundational ones that made me realize I wanted to spend my life thinking about this stuff:

In the story, we meet Tim.

Now, Tim is on the path to greatness.

He's a student at a prestigious high school

Who has a great chance at going to his favorite college

If only he can come out ahead of his classmates.

Luckily, Tim is doing great at that so far.

All throughout this school year, Tim has been blasting past the competition.

While his classmates have been snoozing on their grades, he's been working his butt off and getting straight As.

In every class, the gap is widening,

And Tim is on his way to achieving valedictorian.

Then, something terrible happens.

Tim's school realizes that the rest of the students are falling behind,

And they don't want their college admissions stats to bomb this year,

So they institute a new rule:

All tests for this final trimester will be graded on a scale

Which should ensure everyone gets at least a B or better moving forward.

And while Tim is totally crushed by this news

All the other kids rejoice:

Because now it's easier than ever to get an A.

Tim sulks in his room the weekend after the decision,

His valedictorian title seemingly slipping from his proverbial grasp.

Until suddenly, it hits him:

This is actually the best thing that could have ever happened.

Because Tim's lead in his class was established in the first 2 trimesters,

And now that everything would be graded on a scale,

-Now that achieving an A was so much easier-

The ability for another student to get ahead had basically disappeared.

In order to do better, they would need the ability to significantly outperform other students.

So, by forcing everyone's grades to be at the same level,

The school had basically locked in Tim's lead,

Ensuring no other students' efforts would matter again for the rest of the year.

Fun story, right?

Here's the big problem:

In this metaphor, you're not Tim.

Tim is Google, Meta, Apple, Netflix, Amazon...

We, my dear founder, are the rest of his class.

VC-backed entrepreneurship is a winner-takes-all kinda game.

And if it's easier for everyone,

Then it is VERY tough to win.

Buckle up, all-

Our game just switched to hard mode.

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