Why would you invest in a vibe app though? What's the moat that will protect your investment? That somebody "had an idea"? Conventional wisdom is that ideas are a dime a dozen
Same reason you invest in any seed stage startup: the founder has a vision, you believe they have researched the topic more than anyone else, there's a meaningful total addressable market, and they have the focus and ability to get there. More importantly, you believe they have the resilience to endure for the next 10-15 years, even if they have to pivot a dozen times until they succeed.
Software - at seed stage - was never a moat. It was just a prerequired (and scarce) resource. Classic example: Dropxbox in 2007 [1].
That's not the case anymore (or won't be, at some point soon).
good software (and hardware) was a moat in many cases, google had the best software, others tried to copy pageRank, but google scaled better and faster and killed them. Amazon, youtube, netflix. Many such cases. OSs, Browsers, those are huge moats and moneymakers.
If it can be commoditized, why not just steal the idea and give it to a tried-and-true professional CEO
We're talking about different stages of evolution. Scale is rarely a factor during your first few years. Of course software can be moats, but much, much later.
Anyone could have used Markov Chains to implement PageRank in 1997, but no one did. And Dropbox was laughed at here on HN for being a simple python wrapper for ftp. Any "tried-and-true professional CEO" had the resources to implement something 10x better, but they didn't. It happens that CEOs are usually busy delivering quarterly results, and won't chase every shiny opportunity.
My point (and the article's) is that until recently it was nearly impossible for startup founders to go from 0 to 1 without strong technical skills. Non-technical founders were almost always DOA: too costly to get to an MVP, and no VC would fund someone who doesn't have something concrete to show. Brian Chesky (Airbnb) comes to mind as one of the few counterexamples.
That barrier is now drastically reduced. I'd go as far as to say that the new stereotypical startup founder for the next decade is someone coming from a product / design background, and not engineering / computer science.
things that make it non-replicatable. But an AI-made app is pretty much replicatable. Maybe the moat would be the network effect, but that shows up later, not at the time of investment.
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Why would you invest in a vibe app though? What's the moat that will protect your investment? That somebody "had an idea"? Conventional wisdom is that ideas are a dime a dozen
Same reason you invest in any seed stage startup: the founder has a vision, you believe they have researched the topic more than anyone else, there's a meaningful total addressable market, and they have the focus and ability to get there. More importantly, you believe they have the resilience to endure for the next 10-15 years, even if they have to pivot a dozen times until they succeed.
Software - at seed stage - was never a moat. It was just a prerequired (and scarce) resource. Classic example: Dropxbox in 2007 [1].
That's not the case anymore (or won't be, at some point soon).
[1] https://news.ycombinator.com/item?id=8863
good software (and hardware) was a moat in many cases, google had the best software, others tried to copy pageRank, but google scaled better and faster and killed them. Amazon, youtube, netflix. Many such cases. OSs, Browsers, those are huge moats and moneymakers.
If it can be commoditized, why not just steal the idea and give it to a tried-and-true professional CEO
We're talking about different stages of evolution. Scale is rarely a factor during your first few years. Of course software can be moats, but much, much later.
Anyone could have used Markov Chains to implement PageRank in 1997, but no one did. And Dropbox was laughed at here on HN for being a simple python wrapper for ftp. Any "tried-and-true professional CEO" had the resources to implement something 10x better, but they didn't. It happens that CEOs are usually busy delivering quarterly results, and won't chase every shiny opportunity.
My point (and the article's) is that until recently it was nearly impossible for startup founders to go from 0 to 1 without strong technical skills. Non-technical founders were almost always DOA: too costly to get to an MVP, and no VC would fund someone who doesn't have something concrete to show. Brian Chesky (Airbnb) comes to mind as one of the few counterexamples.
That barrier is now drastically reduced. I'd go as far as to say that the new stereotypical startup founder for the next decade is someone coming from a product / design background, and not engineering / computer science.
What's your moat with any software these days?
things that make it non-replicatable. But an AI-made app is pretty much replicatable. Maybe the moat would be the network effect, but that shows up later, not at the time of investment.