AI coding tools are getting so powerful that all sorts of people are coming out of the woodwork thinking that they can build an entire company in a day or two.
Feed in your hot new business idea into a prompt, press a button, and voila! Out pops a fully formed company – cloud-based product, back-end infrastructure, plus all the business trappings including customer support, finance, and marketing.
Best of all, one or two people can crank all this out in a weekend. Traditional dinosaur businesses won’t know what hit them, right?
Not so fast. When we interview software vendors here at Intellyx, we look for two essential characteristics: differentiation and barrier to entry.
Building a well-differentiated company with AI depends entirely on the human imagination that goes into the prompt. Your idea has to be so unique, so special, that no one else will think of it.
Can you do that? Perhaps, perhaps not. How many people are trying to build businesses the same way you are – and how many of them will come up with ideas similar to yours?
The larger problem, however, is barrier to entry. Let’s say you manage to use AI to build a company that actually starts bringing in revenue. What’s to stop someone else from seeing what you’re doing and simply doing the same thing?
The answer: nothing. The reason it was so easy for you to build your business is precisely why anybody else can build a competing business, in a weekend just like you did.
And if they have more money for marketing than you do, they will squash your business like a bug.
There are a few ways to achieve a defensible barrier to entry. Sometimes founders are able to patent their intellectual property. But patents take time and defending them takes money. Lots of money – money that presumably you don’t have enough of.
The more common approach to achieving this all-important barrier is to build something that is really hard to build. Something that takes many human-hours of effort on the part of a team of experts.
And there’s the rub: no AI-built company takes many human-hours of effort. After all, the whole point to using AI is so that you don’t have to spend many human hours building your company.
To build a company with a defensible barrier to entry – even using AI – you must come up with an idea that requires substantial human effort – effort that AI cannot replace.
On the other hand, if you’re building or running one of those dinosaur companies that wasn’t one of those ‘let’s use AI to build it in a weekend’ efforts, take heart. You’re on the right track.
Just make sure your barrier to entry depends upon real humans spending a lot of time doing hard things that AI cannot do.
Copyright © Intellyx BV. No AI was used to write this article, of course.
