The Startup Ideas Podcast
The best businesses are built at the intersection of emerging technology, community, and real human needs.
Great AI wrapper companies will build valuable businesses despite foundation model expansion, contrary to the belief that all AI startups will be crushed in 12-18 months
The Reasoning
Companies that own workflows, customers, and create network effects will maintain value even as foundation models expand capabilities, similar to how App Store didn't kill all app businesses
What Needs to Be True
- AI wrapper companies must own customer relationships
- Network effects must be established
- Workflow ownership is defensible
- Foundation models can't easily replicate specialized use cases
Counterargument
Foundation models are expanding so rapidly that they'll absorb all AI app functionality, leaving no time to build defensible moats
What Would Change This View
Evidence that OpenAI and other foundation models can quickly replicate complex workflows and customer relationships without losing quality
Implications for Builders
Focus on owning the customer relationship
Build network effects quickly
Create specialized workflows
Don't just be a thin wrapper
Example Application
“AI writing tool that builds proprietary user data, workflow integrations, and team collaboration features that OpenAI can't easily replicate”