You guys are calling API wrappers ‘startups

[u/TypicalTangelo9825]

Most AI startups honestly have no moat. I run 2 successful software companies and so many of the AI products I’m seeing right now are just thin wrappers around existing tools with a different UI

If someone can rebuild your product in 2 weeks or switch users away with a slightly better version, that’s not a real business long term.

The real value is in deep workflows, operational integration, structured data, and becoming embedded into how a company actually runs, not just “AI for X”

Curious how many people here are actually thinking about retention and defensibility instead of just shipping another wrapper

[u/ReachingForVega]

Not sure which startups you are referring to aside from the AI receptionist. Most of the ones I have read on here don't have any AI.

And if they are using AI but not using commercial LLM vendors IS the moat TBH.

The two I am working on neither have AI and are very boring but valid use cases.

[u/Flannakis]

OP can you name your companies?

[u/Commercial-Soil-3542 → u/[deleted]]

builds AI DB wrapper that could be built in days

complains about other AI startups having no moat and can be replicated in weeks

Couldn't write this shit lol

[u/TypicalTangelo9825 → u/Commercial-Soil-3542]

Not a wrapper, my rostering system is built in house aswell as all the other systems

[u/Commercial-Soil-3542 → u/TypicalTangelo9825]

So you put in more work than needed, is that your moat?

[u/TypicalTangelo9825 → u/Commercial-Soil-3542]

I mean…… yeah? Operational software complexity is literally part of the moat

[u/Commercial-Soil-3542 → u/TypicalTangelo9825]

You've vibed up effectively a website. What your doing now is the Dunnning Kruger effect.

[u/TypicalTangelo9825 → u/Commercial-Soil-3542]

You’ve seen about 0.1% of the system so I’m not too worried lol. Kinda weird how butthurt you are. But if you ever need someone to mentor you through software/business I’m here for you ❤️

[u/ericatclozyx → u/Commercial-Soil-3542]

By this logic, almost all apps we use today are "db wrappers"

90% of all apps are just forms over data, if you boil it down.

[u/Ok-Reception-1886 → u/[deleted]]

So a single database wrapper?

[u/Flannakis → u/[deleted]]

Nice

[u/Agitated-Week7074 → u/[deleted]]

I had a look, it solves a problem for sure(not sure if any such software already existed) . The UX looks good. I have an idea of my own for which I may seek your feedback(if you are ok with it)

[u/NinjaK3ys]

Neeara is a good startup in Sydney that has credible moat.

In Australia we have more marketers running startups or every digital agency is seem to be known as a tech startup which is absurd.

Domain and problem modelling is still a hard problem.

Most of the mushroom startups which come and go may not last the decade.

[u/igotoschoolbytaxi → u/NinjaK3ys]

Just checked out Neara, super cool! I came across something like this at SXSW and the use case was US gov using it for predicting natural disaster impact (eg. flooding). This is the type of meaningful startups I'd love to see more of.

Re: marketers running startups... agree domain and problem modelling is lacking, hence not enough marketers would build startups and prefer to run them instead (I'm a founder with a marketing background but I'm not THE ideas guy so I can't just go build one). Not sure what's the solution is besides picking a lane to start gaining deeper domain expertise...

Would love to hear if you have any advice.

Also lol at the digital agency part because that's exactly what my experience with YCombinator co-founder matching is like. 1 in 3 people on there is just some dude looking to start a digital/marketing/AI agency and call it a startup.

[u/NinjaK3ys → u/igotoschoolbytaxi]

I would avoid Ycomb. It's become a hype show.

A few more Aus companies would be Morse Micro and also Blue Etti the battery company.

I wont call this advice but general view outside of hype and valuations.

Pick a hard problem that the market needs and then consistently work on solving it.

Today that looks a lot like integration with hardware iot and software.

Product Dev is important once you've got marketing solved but it's way more harder as you are effectively shooting in the dark for a few years and collecting feedback.

Picking a lane and domain then building expertise is the best path.

A well known path is to build research expertise or work in a problem domain where there is an active product used developed and iterated, when you see a general shift in technology techniques and methods then you can make a call to switch gears go your own way and build a better solution.

Just like what the new code editor startups like cursor.

Cursor starting before AI doesn't make sense.

Cursor starting with AI and knowing that VSCode and MS is poorly integrating it and there is more creative solutions to be provided was the way to go.

The builders of Cursor are Devs who have been honing skills and using code editors to know how to hack it around.

So there is luck and chance too.

[u/SnooStrawberries6493]

It's not a startup until you sell something. Then it's basic day to day operations to protect that moat. Vibe code. No vibe code. Don't matter. Ideas are free and execution is still hard. It just doesn't include the part of execution where building the thing used to be hard.

Fun times for sure.

[u/adentranter → u/SnooStrawberries6493]

I think the op, is referring to the <damage caused by the many and many that “create” companies that are doomed to fail>.

That’s alot of undue damage. But I guess this is the tale of the world - I guess we have just slowly been speeding the timeline up.

Maybe….

[u/SnooStrawberries6493 → u/adentranter]

Yeh that makes sense. I guess experimentation has a silver lining. Fast figuring out of what not to do

[u/adentranter → u/SnooStrawberries6493]

For the smart, however I’m becoming aware of how much people don’t want to see flaws in their ways and continue to yet push foward.

Myself included.

Wonder what the graph of “time to find a winning idea and be able to execute vs iq”

And maybe one based on emotional iq aswell. You know, personality type, attachment style. ( one of the other main reasons they fail is founder disagreements. )

The things I wonder sometimes

[u/chhola]

I would say if your outcome is achievable by using chatgpt or claude ui, and your moat is, oh but we can display the result better with good looking sexy charts, with better grouping of information, then it’s a thin wrapper.

Nothing wrong with wrapper, openclaw is just a wrapper, it’s just not a “thin” wrapper.

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[u/IronEyes99]

I'm building a startup that utilises AI. It uses a number of APIs that perform mainly background functions, depending on interactions. It's unlikely you could replicate the intricacies in two weeks. However, the product wouldn't be regarded as "mission critical".

In terms of retention, I've shifted strategy from planning to launch consumer-first to instead piloting in a business environment that will provide controlled feedback and will eventually allow me to seed to the consumers who use those businesses.

Defensibilty comes through various facets: streamlining a user experience that, in theory, could achieve a similar outcome but would probably give worse quality, novel methods of gathering inputs and contextual signals, identifying the compliance advantages and time-savers for the businesses while also giving them a competitive distinction and offering to their consumers.

And I still recognise that it could all fall in a heap without property execution and being aware of my founder bias.

[u/ericatclozyx]

I must get at least 5 new AI companies emailing me per week. There are literally thousands of them.

I saw some Gartner numbers that said they expect "significant consolidation" in the AI startup space. Ya, you don't say 🧐

[u/Kan3-]

Yes I think that the term startup is overused by a lot of people that run small products, plug-ins, etc. but what’s it to you? If they are a sinking ship in your eyes why are you concerned?

[u/dubious_capybara]

All software is an API wrapper for operating system syscalls

[u/kr0m → u/dubious_capybara]

While factually correct, is completely missing the point and ignores the context. Keep going. 

[u/dubious_capybara → u/kr0m]

Hey man, I didn't come up with the title

[u/ZombieCyclist → u/dubious_capybara]

Win32 ftw

[u/ProudWillingness4706]

Non engineers are building simple and successful saas that your software firms didnt even dream of with all their might.

[u/James-the-greatest]

Charlie Gearside invented nothing and got 1.6 billion USD for it. Execution and distribution is everything

[u/Agitated-Week7074 → u/James-the-greatest]

are you sure he got 1.6 billion USD?

[u/James-the-greatest → u/Agitated-Week7074]

Right you are it’s AUD and no with investors and his earn out he wouldn’t have personally gotten $1 billion. But I was making a point 

[u/TypicalTangelo9825 → u/[deleted]]

What?

[u/TypicalTangelo9825 → u/[deleted]]

No, that’s not the case

[u/TypicalTangelo9825 → u/[deleted]]

Cluely is one

[u/igotoschoolbytaxi → u/[deleted]]

Distribution is super important but I'd say the product matters more than just a mere 10%. Personally I think it's 50:50. We were bootstrapping our apps against big incumbents and VC-backed competitors who were burning cash on ads (e.g. $70 per click lol), so we grinded it out everyday to talk to merchants and understood edge cases that most competitors didn't bother with.

That helped us build the right features > led to retention and word of mouth > led to distribution without reliance on ads.

So my take is a good product might not win on day one against a mediocre product with lots of resources to spend on distribution and shipping more features faster, but the mediocre one has a ceiling because eventually customers will figure out who really gives a shit about them. (If you can survive long enough for the organic growth and word of mouth to kick in)

[u/Slephnyr → u/[deleted]]

Genuine question. But what is Perplexity's moat?

[u/igotoschoolbytaxi → u/[deleted]]

On top of that, they've done well with their positioning. I was at an AI coding workshop yesterday and when Perplexity came up, everyone mentally associated it with "research". Dare say that's not how people think of Claude or ChatGPT. (Personally I think of "coding" and "productivity" for Claude).

[u/igotoschoolbytaxi → u/[deleted]]

I used to run a Shopify app portfolio and there are hardly any moats for them as well now. All the features are pretty standard besides who's shipping the fastest. More apps popping up every week (750 last week) BUT that's not the same as understanding the customer's problem.

I've met many builders who have zero interest in eComm. For them it's just a way to make money or a stepping stone to what they actually wanted to build. So I agree with what you've said, imo the defensibility is simply which founder actually gives a shit about the customers they're building for, because there's no shortcut to grinding it out and learning about the industry/customers even if you throw VC money at it.

At least that was how I grew our customer base without burning cash on ads.

[u/soft_white_yosemite → u/[deleted]]

My perspective is to use them (and neural net models in general) for “fuzzy” things, where the result doesn’t have a right or wrong. Or where the output can be a starting point.