How do AI-native startups outpace incumbents?

Ben Horowitz

Horowitz · Andreessen Horowitz

Better proprietary data

Ben Horowitz says the advantage is better proprietary data, which comes from a data feedback loop; he cites ElevenLabs getting developer customers and real-world voice data.

The answer starts at 42:06.

Itamar Novick

Founder & General Partner · Recursive Ventures

Domain expertise

Itamar Novick says the competitive advantage now is domain expertise: deeply understanding customer needs and rewiring their workflows with AI to deliver tangible ROI, since AI coding tools erased the old speed advantage.

The answer starts at 21:31.

Tomer London

Co-Founder · Gusto

Speed

Tomer London says speed: AI makes the whole software development process faster, from researching customer issues to coding, so his team ships features quicker and doubles its velocity.

Andrew Ng

Founder · Deeplearning.Ai

Low building cost

Andrew Ng says low building costs enable this, because AI has made the cost of building plummet and shifted the challenge to deciding what to build.

Adam Guild

Co-founder & CEO · Owner.Com

AI-native approach

Adam Guild says an AI-native approach is the answer: his company reimagined its product, operations, and customer journey to be AI native, and he cites faster growth and most new customers starting via its AI products.

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Matt Taylor

Founder · Trepo

Access to faster development tools

Matt Taylor says the answer is access to faster development tools, because using tools today can increase development speed—a step function—and his own development has been much quicker than anticipated.

Adam Foroughi

CEO, Co-Founder AppLovin Corporation · Applovin

AI-native culture

Adam Foroughi says AI-native culture is what lets AI-native startups outpace incumbents, since they were started in this era, hire for it and are structured as such.

Andrea Hippeau

Partner · Lerer Hippeau

10x engineering productivity

Andrea Hippeau says AI gives 10x engineering productivity: you can 10x your engineers, so early-stage companies need fewer engineers and can invest less while getting more.

Low adoption friction

Matt Murphy says low adoption friction enables AI-native startups to outpace incumbents, because the technology is ubiquitously adopted and any user or engineer can pick it up without scaling a salesforce.

Mark Peter Davis

Managing Partner · Interplay

Higher accuracy

Mark Peter Davis says higher accuracy is why AI-native startups can outpace incumbents, citing Alma's immigration approvals over 99% versus humans' 80% because the AI is better than humans alone.

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Todd Olson

CEO / Founder · Pendo.Io

Engineering mindset

Todd Olson says the secret to success is companies applying an engineering mentality to leveraging technology, because when they see something it isn't good at, they attack that problem and figure out how to make it work well.

Dr. Thomas Otter

General Partner · Acadian Ventures

Focus on new AI-only solutions

Dr. Thomas Otter says well-funded startups have an advantage because they can think purely about building brand-new things that weren't possible a year or six months ago, while incumbents try to improve existing products with AI.

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Joe Lonsdale

General Partner · 8vc

Model progress

Joe Lonsdale says model progress is the underpinning that drives everything else moving faster, compressing product launches and helping companies reach customers and rapid revenue growth.

Sam Altman

Chief Executive Officer · OpenAI

Fluency with AI tools

Sam Altman says fluency with the AI tools will count for more than years of experience, betting this shift cuts against long experience in favor of people who have that fluency.