He gives one the best pieces of advice I've ever heard: if you are going to do something for a living, make sure it is NOT scalable.
If you do something that isn't really scalable, like being a welder or a tailor, then you only have to compete against the tailors in your neighborhood, and you can easily find a neighborhood that doesn't have a tailor. If you're building a scalable product, you'll always be competing against the best, most well funded, smartest people in the room.
Everyone here has grown up in the birth of the internet -- a once in ever event -- where building something scalable was just there for the taking. That's never going to exist again basically.
What it really comes down to is these options as more work gets automated:
1) New jobs doing different things that weren't done before
2) Same jobs but shorter hours so "full time" with a salary to match starts to look more like 4 days, or 5 hours/day, or something.
3) Lots of unemployment
These can happen in a lot of different combinations, they can come wrapped up in different ways, and unequally for different segments of the workforce, but there's limited elasticity in most areas where additional people piling into the field would create more demand rather than glut the supply to the supplier's detriment.
Of course past performance is no guarantee of future success...
I'm not saying it's easy! It's hard as hell. It sucks when your job gets automated. I'm just saying that aiming for something non-scalable means you're not always tilting at windmills, and the game can't be rigged against you.
"Becoming a teacher" takes years.
"Becoming a successful scalable business" has no known time frame. It either happens or it doesn't. And whether it does is not particularly correlated to how much time or effort you spend on it.
Your above point can not be upvoted enough.
You do have to wonder what some people are thinking ;)
Good message from Taleb too, he may not be the most likeable or agreeable person in the world, but he is quite brilliant at synthesizing logical meaning from the inputs he does have.
I remember about halfway through Skin in the Game, after being put off by most of what I'd been reading, that the gestalt shift happened and it finally clicked. It's probably one of the best texts I've ever read on a specific type of conservatism. I don't like that I agreed with it, but the guy makes a very, very convincing argument.
The point is not to do that ever.
Just gain one of the skills like that and plant it firmly on your resume, before trying anything more risky.
Like starting a business, which might not actually cost as much or take as long to get a license.
And with no further delay needed before any future pivots, when you might need quick alternatives most.
Even if you only go back to teaching for a while to regroup.
A fact endlessly annoying to electrical engineers who legally can design their houses power system but not work on it.
(I mean I think a barber is quicker, but one of that list is also not like the others)
My point is the author writes a column about how GPTs are ruining the ability for people to make scalable products, because when everyone can make one, nobody cares... my point is that that's not the result of GPTs. It's a result of survivorship bias skewing how we look at things.
When your business is a flywheel than needs to be running to provide a benefit to each user, then getting that flywheel running is a huge problem. The vast majority of non-scalable businesses, almost by definition, provide each customer with a benefit regardless of whether anyone else uses it. That is how you create basic, word-of-mouth, free "earned" marketing.
But how can you be sure a job is peak-automated? A few years ago, I would have said musicians are post-scaling - way fewer musicians jobs now that you can play recorded music. But it looks like generative AI will hit musicians again. Can some of welding be automated? Probably.
Tailors typically operate a launderette and act as middlemen to a local dry cleaner.
I’m not talking about a fancy man making clothes for rich people, I’m talking about the talented old lady in you neighborhood who adjusts your clothing for $50 and runs a wash and fold.
But me? I buy a pair of $30 jeans at Costco. If they don't fit great, I buy a different pair of $30 jeans. I don't spend $50 to have them altered, or take it to a laundrette. If it can't be washed in our home washer/dryer, I don't buy it. And these days, when a sock gets a hole? I throw it away.
I like golf. Most people use a standard shaft. In fact, that shaft length is standard because most people use it. That doesn't mean there isn't an entire industry for "golf fittings" because "most" people isn't even close to everyone.
But at least they're not going to disappear completely.
And now there's nowhere to go but up :)
They have had the internet a while too, keep in mind a select few have gone viral on Etsy while so many SaaS things don't return a fraction of their potential.
Huge amounts have been doing it for decades.
Manual work pays better than ever though.
And plenty of alterations going on all the time after all the automation dust had settled manufacturing most fashions, a lot less manual work is of course being done but it's still everywhere. You do have to be good or you're not going to do half as well as you could though.
The thing is, automation should be expected to slow or stall sooner or later, automation's not suitable for every little bit of welding or sewing that needs to keep going on. Only the most suitable, of course ;)
These are just random examples, if you want to make absolutely sure you won't be automated away by the internet, build a valuable skill that doesn't depend on the internet at all, nor look anywhere near the places where automation is emerging that it wasn't doing before.
If you eventually figure out how to automate that skill it would be something.
Just like the internet though, there can be extra credit for being first :)
One of the most valuable things to be able to build single-handedly is something that can not be mass-produced by any stretch of the imagination.
You might stick with that alone, or pivot to something with more of a financial upside, but you would always have something to fall back on if needed. Plus give you less worry about taking financial risks than you would have been, considering the same resources and/or capital to work with.
And on a regular basis revisit how far you can stretch your imagination to see if your baseline fallback still doesn't look like it will ever be automated in a way that would effect you.
Probably the best way is to spend a few years working for a company where you can get a better picture whether it seems that way or not.
You need to consider both horizontal and vertical scaling. Being a bespoke tailor may not scale vertically, but it can scale horizontally. If you have too many people pick up tailoring, you might run out of neighborhoods without competitors.
I guess it also means that if you build something for a niche audience then big companies will never be interested in it.
Sounds like a great life to me.
One of my favorite niches :)
Some clients are good enough at math to figure it out, and you don't actually need that many of them if they are big enough.
One early approach when starting to build a reputation is to work as a subcontractor to a less-big company who has already gone through everything to be on the approved-vendor list of the massive corporation.
Even better if the less-big company is a private company and the biggie is public.
A private company will be able to figure out the benefit from your work better than most, and hopefully profit from it.
I like it when every time I invoice a client, they are making money at the same time, whether they are making it from me is not always necessary if I am participating in an overall money-making process they are going through. Especially routinely. It's just fine to be a very small participant in lots of activity going on between the big-shots.
Big companies can have so much work and be able to pay so well that your position can be to merely absorb the overflow from the primary contractor, even if you do not yet have a unique offering.
Then it's good to build into your exclusive-but-related niche, which would be intended for a different division of the biggie and expect it to languish unless your already-established client can use that too.
Eventually after you finally get to meet the right person in the target corporate division, it will be after you have already been doing work for that same corporation through the approved primary contractor.
By this point you've already been doing critical work for that corporation exactly like they need, that you can be proud of and point to, and it can be a whole lot more likely to become an approved vendor yourself. From which position you can finally negotiate fees directly with the most well-heeled corporate source, this would be the first time if you were only working for other primary contractors until then.
Ideally you will then be invoicing a different office of the same corporation that you were subcontracting under, there will be no conflict of interest, and you can continue working for the original primary contractor too.
And your most promising niche finally gets to launch with about as much upside as it can get.
You mean like opening a restaurant?
Too bad delivery services like Uber Eats totally own the market now.
Starting a hotel? Booking.com and Airbnb are there to take your profit margins away!
You can scale the system (say Subway, or even smaller chains like Burger Fuel), but also reasonably choose _not_ to scale and still do incredibly well (like Michelin star restaurants, or the myriad of hyper-famous-locally Japanese eateries, or Fergburger in Queenstown).
Someone scaling their own restaurant on the other side of the world won't necessarily out compete out (and in the overwhelming majority of cases with have no impact at all). Despite fast food joints all over the place, I still see small cafes, individual eateries, etc performing well (I mean, as well as hospitality can be).
Maybe it's worth expanding the definition of > make sure it is NOT scalable < to include 'make sure it's not automatable'?
What if your goal is for them to buy you out?
Plus, who wants to spend any time competing with the stongest contender anyway, especially to get started :)
Great advice but difficult to action though.
I mean 10 years back I'd have thought programming is that thing which is not scalable. I had every reason to believe that. It required skill, experience, ability to stay current, grit for debugging hard stuff. Much of it can be automated now.
What can I pick now for a living that is not scalable today that some future technology would automate it just as easily.
As scalability becomes more accessible like with coding agents
The less it becomes about money but distribution
While money can buy you the latter it may not compound to something that is sustainable
(Granted, to the main point, I still think a tailor could be automated in some distant future, but we'll need robots to perform physical interactions, not just software.)
Normal people wear clothes containing minimum 2% elastic and perhaps never, ever visit a tailor in their whole lives, except maybe one at a tux rental place or a wedding dress store, for their own wedding. If they repair clothes, it's sewing on the odd button at home or using iron-on denim patches. Past that, it's just not worth fixing, normal folks' clothes are so cheap.
The whole market for tailors is practically an affectation. It's not serving much actual need any more, not from the perspective of the overwhelming majority of people who are happy with stretch-denim jeans and polyester sportswear jackets and such. It's basically 99% of the way to being an obsolete job, kept from total death by a few enthusiasts. Only a bit more lively than the market for, say, authentic regency-era footwear or something like that.
(I am a fellow weirdo, for the record)
Clothing is really _fashion_ for tons of people. Fashion is art. People like art.
A dead industry often doesn’t entirely disappear, it just shrinks a bunch and comes to rely entirely on enthusiasts or very rare actual need, rather than broad need or appeal. Consider the draft horse breeder, or the carriage driver. There’s a market for both professions! But they’re itty-bitty. The day-to-day need for both is gone.
Tailoring is hovering right in the edge of that kind of status, today. It’s dying, killed by $10-30 shirts and $20-50 trousers and $50-100 jackets all from largely synthetic materials, and a society that no longer expects anyone to wear anything “fancier” outside certain events.
I mean, outside very unusual circles, dinner jackets are essentially ceremonial costume-wear, and business suits aren’t far behind on that track. You gonna wear a tailored wool hacking jacket or breathable linen Norfolk suit on your camping trip, or a bunch of polyester and nylon stuff from REI? LOL. All the situational tailored clothing but the business suit and blazer are near-extinct unless you want to look like a cosplayer, and those are on borrowed time.
"There is no money in tailoring" seems right. It's the "not all things need to make maximum $$$" that I speak to. You didn't pick this fight though, I did heh.
My (successful) friend tells me all about how amazing it is to collect very expensive watches. I just need to be a "watch guy" and I'll come to understand. Once my eyes returned from rolling out of my head, I did concede a great point he made: there is no reason for watch makers to exist anymore. The fantastically amazing history and evolution of time-keeping and personal time-pieces is now purely supported by rich people that care to subsidize the art form. And so, maybe I really do aspire to be a watch guy after all... hmm.
If you’ve never done it, I strongly recommend getting your jackets tailored. Even a casual jacket will fit and look non-trivially better for $50-$100 and an afternoon at your local tailor. You can even get things like cycling gear tailored.
Uh.. I don't mean to be that guy, but tailors aren't even operating in that market.
People who use tailors aren't interested in off the rack items.
Even when they do purchase off the rack or even secondhand items..
they'll go have some of those items tailored.
Not anymore.
It's been well over half a century since tailors operated in the "cheap clothing" market.
The clothes tailors make have, pretty much, always been expensive relative off the rack department store options.
Probably because tailor made clothing doesn't "scale".
Creation has progressively been getting easier since the invention of the computer, it is not a new phenomena. This naturally pushes the boundary on what needs to be delivered in order to find paying customers. In other words, creation still is "hard" if you want to succeed.
> I launched something last week. 14 people signed up — no ads, just a couple of posts. 14 real people who didn't have to. That number is tiny and it felt like something. Then I sat down to think about what it would take to grow it and I couldn't look at that math for very long.
This applies to 90+% of founders that have ever launched something. The hard part comes from continuing to push forward when you experience this (which you will over and over). It sounds like the author expects that what was hard suddenly should be easy.
I didn't read the article, but yes, going from 0-1,1-10 is really hard and really rewarding. And it got easier with the Internet. Going from 10-1k and 1k-1M is a different ball-game. Always was.
The dream of running my own company got me to learn programming. 20 years later I'm an employee at a company still dreaming of running my own company. But now I can realize that reality and dreams are not the same and that's ok. As in, I probably really don't want to run my own company. We'll see =P
To me having one own's company was just a means to the end: making enough money to live comfortably without the need to get a job ever again for the rest of my life. I too learned programming as a means to achieve that end but eventually realized that I don't need a company if I can short-circuit the path to money. By switching to the right domain - finance, where what I learn might be eventually put to use directly by investing capital into profitable trading strategies.
Back to OP's article, if there's a domain where money as a moat is not a problem, that's definitely finance: https://www.visualcapitalist.com/all-of-the-worlds-money-and...
I work in this domain since almost 20 years and can tell you, noone's gonna risk a billion dollars on crap vibe coded by AI. I wrote before, I don't know what crack these AI people are smoking but when there's real stakes at play, they don't play around with toys. And AI in programming is a toy. The unlikely triumph of "Can I haz teh codez?" CTRL+C / CTRL+V "prompt experts" (mocking it, lol) strategy on Stack Overflow, along with the people who employ it.
I'm not worried about MY particular future in this industry. I'm not worried that AI is gonna replace me, us, or write anything significant here at all in the foreseeable future until it fucking evolves into AGI which is somewhere 5000 years from now, optimistically.
The party's gotta come to an end really soon along with the figures on how much money AI makes versus it's real utility - which is, simply stated, "a toy".
Not necessary but here's my mood while writing this comment: - listening to this song: https://www.youtube.com/watch?v=6EWqTym2cQU&list=RD6EWqTym2c...
This means that until you reach that threshold, it feels like you're not making progress, cause every video just gets the same result (no views). Even if below the surface, you're slowly inching closer to that moment where your videos will actually be watched.
LLMs are just glue between pieces of your code you still need to be able to plug them into a coherent architecture to do something impressive.
I'm sometimes baffled by what people think can pass as a product in a real sense.
But I honestly can’t think of anything you could do in a week that a company in 2015 would have paid billions for unless it’s something like tweaking an LLM. But in that case it’s the original model, not the 1 week or work you put in.
such as?
WYSIWG Site Builders, text Chat bots, audio Transcription, voice synthesis.
Yeah building from scratch would take longer, but you can slap a UI, a DB/schema around modern APIs and output something that would be science fiction 10 years ago.
Only for developers. Outside of software creation is still hard. Global markets giving access to excellent manufacturing sure does help, but software is a bubble.
Yes, you need the idea first of course. But that's truly the easy part. 99% of "ideas" rely on great execution to be worth even looking at - much less paying for - for anyone else.
This is about marketing, about getting people to know and care that the thing you built exists. You can execute perfectly (in terms of making a great product) and not get a single eyeball.
The moat isn't money for out-marketing your idea that 750 other people are building, it's having a good idea that solves a problem that nobody else is solving well.
I don't know much about film industry, and I have a ton of brainfog from being sick today.
Could you say more? What made them a hotshot? They thought they were like, creative geniuses with digital film or something?
Creative genius is one game, but it's far from the only, or even, main one.
Hope you feel better. <3
This isn't true though.
Yes, there are too many products being build that don't serve anyone's needs or solve anyone's problems.
However, many of the AI products do solve problems and serve needs.
You're right though, to compare this to other booms, which also had the same problem. This is very much a "hyper" version, which is pretty incredible to be in the middle of.
If you have a product that:
1. Solves a real problem people would pay for
2. Is not trivially replicable by your potential customers or competitors
3. Does not have a natural discovery mechanism by potential customers
Then you need the marketing budget.
That is not most people's problem.
It will take a few years for investors to figure this out, but in the meantime, everyone is spreading their bets around like peanut butter in order to be in the game.
Unless your thing has strong network effects or a large capex requirement (ex: GPU infra) its easily replicated and I think that's really what makes things hard.
Every solution to a problem comes with its own costs. It is entirely possible that most solutions that are rooted in modern computing technology have actual or perceived costs that exceed the value of "solving the problem".
The problems that most people have that they really want to solve are not addressable by AI, or computers, or software.
Added emphasis to the most crucial part, in my opinion.
If you can manage to deliver a product that's meaningfully better than the competition, you still have an edge, so long as you're competent at marketing.
Nothing gets people searching for alternatives as consistently as frustration, and a product that was lazily built with AI (vibe coded or otherwise) is going to be full of bugs and papercuts that make using it a poor experience.
This is particularly true for software that sits in the hot path of peoples' workflows, where thoughtless design, misbehavior, and poor optimization chip away at time the user can't afford to spare.
In short: yes, competition will be plentiful but it will also be almost entirely awful, and capable SWEs can capitalize on that. It won't take much to stand out amongst the mountains of garbage that will be generated in the coming years.
This is a very naive take. Any good idea you have can now be cloned trivial in no time at all.
The clones just need to out spend you on marketing even though it is your idea that the LLM cloned.
Which is my point: it seems easy to clone something that seems conceptually simple, but is the result of all kinds of UI, UX, performance, etc optimizations. The reason someone might choose Obsidian over these so called clones is not just marketing, I assure you. The reason people attempt Obsidian clones is that they think creating todo-list management tools, etc is all it takes to implement a PKM, and that that is easy. It is not.
Right now there are kinds of tools I wished existed, that I would pay for, but AI does not automatically provide the insight, good taste, technical excellence, and grit needed to create these products. I could do them, with AI assisting, but do not have the time. It is not a simple matter of saying: Claude, create or clone X, Y, Z.
Are you seriously contending that apps that have Obsidians functionality don't exist?
Just on HN alone, throughout 2023 - 2025 we were seing like one new TODO app show up on HN weekly!
> And why not the others?
Because money is the moat, and they have it!
That was my entire point - money is the moat.
> Just on HN alone, throughout 2023 - 2025 we were seing like one new TODO app show up on HN weekly!
This response shows you missed my point entirely. I am saying a todo app does not a PKM make! I'm not interested in a vibe-coded todo app, it is useless to me.
> Because money is the moat, and they have it!
You're sidestepping issue and contradicting yourself. I asked: if cloning is so easy, why has no one cloned the JetBrains IDEs, for example?
Remember, I'm not talking about what happens after the cloning. Are you saying no one has cloned Jetbrains because it takes a lot of money to do so? That would contradict your claim that AI makes it easy.
Having money is NOT an economic moat-- i.e., a durable, structural competitive advantage.
He overlooks broader, true definition of moat attributes like labor supply, infrastructure, PP&E, brand, network, natural monopolies, switching costs, regulation. These don't go away with commoditized CRUD apps.
And quoting someone with decades of experience implying that things are hard now and innovation didn't turn over industries in the last 25+ years is a joke.
Marketing, lawyers, good customer support, creating relationships with customers.
I wonder if this type of hustling can be called moat building?
An idea is not a moat. Execution is only a moat if being nimble is part of the ongoing offering.
Why invent the cotton gin, find investors, and bring it to market if the steel company with the infinite worker machine can instantly compete with you?
Currently people are taking AI hype too seriously and extrapolating its success out in such a way as to discount the value of other businesses.
Example - last week a bunch of trucking stocks crashed 10-20% because a $6M company that pivoted from Karaoke to AI demoed something.
This is just insane. Sure, if say Waymo is pivoting into commercial trucking.. maybe. But people are basically shorting minutemaid lemonade because their neighbors kids opened up a lemonade stand. Demos are easy, products are hard.
I always ask people, in the past year, how many AI-coded apps have you 1) downloaded 2) paid for?
1. Other app stores like Google Play and Steam haven’t seen this rapid rise.
2. There are thousands maybe tens of thousands of apps that are just wrappers calling OpenAI APIs or similar low effort AI apps making up a large percentage of this increase.
3. There are billions of dollars pouring into AI startups and many of them launch an iOS app.
I'm not talking about the AAA or the AA or even the A space (where AI is being incorporated into dev processes with various degrees of both success and low effort slop), I'm talking about the actual bottom of the barrel.
AI just helps create some assets for games, it doesn't really make it easier or faster to make games but they might look a bit better.
I mean, there is evidence for some change. Personally, I'm sceptical of what this will amount to, but prior to EOY 2025, there really wasn't any evidence for an app/service boom, and now there's weak evidence, which is better than none.
In the past 5 years, the only "new" app I've added to my phone has been Claude.ai.
Before that I guess DoorDash. And that probably covers the past 7ish years of phone use.
There's just too much shit in the store, a lot of it is scammy or has dark patterns.
For me, "app stores" are largely dead.
But if you're just talking the fairly simple apps that a single very talented programmer could pump out before this, sure, yeah.
The zip2s and OpenClaws of the world
Her payroll company was going to charge her an extra $200 a month.
It's trivial for competitors with bigger pockets to outcompete you on your idea, and there are companies whose business model is just that. And with AI customers are trying to do it themselves as well. The only startup I wouldn't be nervous about as a small team without large financial backing would be ones where we start out partnered to multiple companies in the targeted industry so that we can leverage that connection.
Historically this is why we have copyright/patent laws. To make it make sense for people to try to bring their ideas to the world. But with everything changing we are back to everyone just sitting on their concepts/solutions unless they have big money behind them.
Today, the money-making side has staged a hostile takeover.
The attention conundrum is just a symptom of a deeper financialization. Multi-billion dollar companies have turned profit into a data-driven science – analytically turning the screws on every script, product, and interaction to optimize for extraction. This is the destruction of the art of making things.
The real issue is that you cannot compete with an entity that has no respect for the art. When a platform replaces the integrity of the work with the logic of a metric, the independent creator is no longer an underdog – they are functionally excluded. You can be the best at any art, but in a system that prioritizes sheer extraction over excellence, your craft effectively ceases to exist.
Money (better thought of as credit, since we are talking about fiat here) is an attractor so much as it can stand for or purchase productive energy. If that fails (central bank failure, currency failure, government failure), creativity takes its place
Correct me if I'm wrong but, you may be thinking of restaurants where their defining factor is "having a very creative atmosphere", which will not suit all customers. However it is a differentiating factor which will serve a big audience that is under served in a location filled with "boring well maintained and staffed restaurant".
In my view the creativity comes in in finding solutions to a problem, in a oversaturated market the problem may be "how do I persuade customers to come to my restaurant instead of my competitor?". And following that question may be (in the restaurant example) "what can I offer that is under served in the current market?" The solution to that may be "a biker cafe" or "an overpriced "creative" restaurant where the waiters are terrible and the chef is even worse" (perhaps even rude on purpose).
Additionally I assume you want the restaurant to grow. If you want the restaurant to just survive the bar is lower and you may be able to do that by doing the same everyone else is doing as long as you meet the minimum.
Don't underestimate the effectiveness of advertising, or its ability to influence you.
I particularly despise these ads in Maps because the ad often obscures the search result I'm looking for -- and I end up accidentally clicking on an advertisement for some other restaurant than the one I was looking up.
The vast majority of valuable copyrighted/patented creations are works for hire, which is compensated just like other labor. Or the creator signs or licenses the rights away to a publisher and maybe receives contractual royalties, rarely more than the initial advance.
(An alternative answer is "the pay for your creativity is a capital asset. That asset can earn royalties. Usually it doesn't.")
Font/Typography sales?
What about Pluralsight/Udemy courses?
Substack/Patreon membership?
Buying printable art from etsy?
I am a firm believer of "limitation breeds creativity" and being able to make what you want with immediate result will lead to less diverse solutions. In a world of in-diverse products you need more creativity to stand out as it will become harder to conceive of something "outside of the box".
Similarly to how anyone can basically create any image they desire in Photoshop (with some limited training). Leading to a lot of images of a similar style instead of a lot of different styles (ai slop anyone?). This is because between the idea and the result the roadblocks are reduced, the process is smooth (tools aim for 1:1 conversion). In the creative process these roadblocks are usually where you will find interesting new directions or ideas. And very often the original idea was not that interesting to begin with (and perhaps not as original as we would like to believe).
One day we might be able to write software without bugs. That day is clearly not here yet.
(Firefox in Linux if anyone wants to repro. Can’t file a bug as it’s a closed, proprietary piece of software.)
However, I've gotten doubts about the value of creativity and having a vision. Plenty of people have great creativity and a fantastic vision, and we can see already how AI allows people to churn out interesting and useful projects at much faster pace than just a few years ago. The problem is that it seems more and more impossible to actually make a living of that.
Anybody with the money to have access to enough AI will be able to create a clone of software X. We might not be there quite yet but it's just a matter of time. That seems to be a death sentence for any small software business.
But it's also not a moat in the same way. It's accessible to everyone, but you have to actually disregard the parts of yourself that want to drive hard in some direction just for money or power or external validation.
From the look of things right now, it may take some pain before that really gets to shine.
Nevertheless, by counter-example -- OpenClaw's creator was just recruited by people with more capital than countries.
If they could "re-produce" it with their capital, they would've preferred that.
Whatever he has, is still a moat. What that is, is debatable.
Is it brand? Is it his creativity? Is it trust/autheticity? A vision? Ownership of a repo or leadership of that community?
All those are perceived moats (or risks) by these folks that tried to scoop him up.
In the case of OpenClaw I think you're looking at a fairly pure iteration of luck there, too. It isn't even a case of "I prepared for years until luck finally knocked" or any variant like that. It was just luck.
If that is the only counterexample I'd say it doesn't disprove the point, if anything it just strengthens it. Nobody can build a business plan based on "I plan to be as lucky as OpenClaw".
I don't find a single counter-example compelling. I guess as evidence that "only moat" is somewhat hyperbolic?
But to counter the counter-example, what would have happened if he did not join? OpenAI can just write and release their own version. They can then do the typical loss-leader and advertising tricks that OpenClaw cannot.
The "simply write and release" is what used to be a barrier.
I advice to grow up and do some proper research on what problem to solve, and how to build trust with audience before pushing your products.
I dont have much money or prior reputation when starting out, I blogged weekly, then slowly launched technical ebooks, one time utility app, and finally SaaS , took me about 6 years of showing up every day to have a job-replacing income.
Your other post mentioned you gave up and declared failure after 3 weeks of launching your SaaS, I think the timeframe expectation you had might be unrealistic.
PostgreSQL, for example, has a ton of mindshare. It will be hard to dethrone it.
OpenSolaris was Sun's attempt to recover from the loss of mindshare to Linux. The a company that had become dominant in databases due to mindshare acquired Sun then failed to understand the mindshare play, and it killed OpenSolaris. Explain that one to me.
Even mindshare might not be such a moat now.
Furthermore, the only users who will actually pay for AI are these assistant-using developers and other power users -- people who will not hesitate to switch to something better. We are already used to new model releases being neck in neck and there is no real incumbent/underdog dynamic going on here.
Yes, there is strong mindshare among the normies, who only know about "ChatGPT", but as soon as they graduate into a powe user, then the above applies to them.
Building a static HTML page was “hard” in the 90’s. It took actual skills.
Any piece that gets easier automatically opens up more hard avenues to tackle.
no one is willing to pay you for easy.
Making a dynamic page was harder. Integrating with a payment system was almost magical; there’s a reason PayPal became big.
But what was truly hard, and continues to be hard, is building a page, either static or dynamic, that people actually want to visit.
So maybe the solution is: find the hardest stuff to do and do the crap out of it.
Conversely, a good strategy can get you good results without that much effort.
Not that I know much of anything.
Just because you're doing something hard, doesn't mean anyone wants it.
Just because you're doing something useful doesn't mean you're going to get paid much for it.
Just because something is hard and useful doesn't mean someone is going to pay you for the cost of the effort.
Not saying that’s what will happen in reality, but that is the marketing pitch
There's an easy fix for this. Agent to Agent SAAS
To answer your question. Yes to a player already in a market with lack of funding, a billion dolars could be the necessary moat to win.
Money was, is and likely will be a moat for a while. But as a proxy, it may not be enough as a moat. Scarce resources may require more than money— e.g. IP classes or, if you're China, ASML machines.
And let's be honest that's not a new thing. It's been already a long time since you had a revolutionary idea in the shower only to google it(or use an LLM nowadays) and discover that there are already eight different apps that do what you were thinking.
The hype machine currently pushing for agents is selling agents ability to do automated marketing. However the bigger companies know better than to create giant security holes and the small players are either not technically skilled, or will balk at the huge per-use fees for the good models, or will be drowned out because of low quality cheap model output.
This seems like an incredibly niche product that only a handful of people are interested in to begin with. It isn't an notable or surprising result that building it resulted in little interest from general audiences.
At the same time, I see the appeal. I feel like 10% of the comments I read lately are "is this an AI response?" - would be nice to be free of that. Probably not possible tho.
It feels like that doesn't it? But, as one counter-point, OpenClaw. :)
Btw I did a deep-dive into AI moats last week and wrote a blog post about it. Relationships were most likely the strongest moat from my research - but definitely having a large amount of money in reserves helps. https://www.cjroth.com/blog/2026-02-11-moats-in-the-age-of-a...
Another conclusion could be that as building software gets easier (like it did for ex in the 90s and again in the 2010s), opportunities are created for new entrants to displace Bad Old Software.
Those expensive Enterprise apps that everybody hates? Are absolutely begging to be replaced by something better for half the money.
We still live in a world where most individuals own more compute power than most universities did in the '80s, yet the only sign of automation is useless push notifications.
Data behind one pane of glass can't easily be moved to data behind a second pane of glass. Simple stuff like "move my Instacart shopping cart to Costco.com same-day" is a manual affair. This is a subset of the general problem that more apps has resulted in more data silos that are generally isolated, without APIs, without automation.
There are zillions of problems out there for which people will pay money, but money chases the same 4-5 problems at a time. Just work on one of the other ones.
This didn't happen for music.
It is much easier to create/record music today than in the 70s and 80s, but the music created today is mostly boring AI music and not new exiting/inventing music.
One thing hasn't changed: people get older and hate on music that the youth like.
I'm not saying I have the next metagame figured out, but AI doesn't magically solve all the worlds problems by existing. It likely even creates a new classes of problems. In such an environment there's going to be opportunity.
Are the software shops and devs who were winning at churning out SaaS products going to be the best suited to this new environment? Maybe not, but adaptation wins over non-adaptation, something that has always been the case.
Hint: Money is a nice thing to have but it is very definitely not a moat.
If a company is making above market returns and the only thing stopping a potential competitor from competing with them (aka the company's so-called "moat") is that "it takes money", that company does NOT have a moat.
It's very easy for a potential competitor to calculate that, after x-months or y-years, they will have made enough profits to pay for the cost of building the competing product. As long as that amount of time is finite, there is excess profit for a competitor to take, and the company will find it's so called "moat" wasn't a moat at all.
This isn't a new thing. It's been a fact for centuries or millenia. It's one of the many things that makes success in business hard.
Porter's Five Forces is one distillation of the foundational principles on which moats can be built (and yes, this is a non-trivial subject, so success in this area generally does take more effort than just reading or skimming the Wikipedia page, but if you had to distill it down to one sentence, it's probably "try to build something that has network effects").
in this context i think where money becomes a moat is when you consider Google can keep advancing their LLMs and tools while operating at a loss because they have the cash and revenue to do that. They'll just keep going and wait for everyone else to go bankrupt and then the whole AI market is theirs. In that way money, and the ability to out last your competitors, is the moat.
Wrong. Creativity, innovation, intuition, taste - all forms of thought solely inherent to humans, all going up.
I'm a novelist and software engineer. The value of one of those skills is trending to zero. I'm not seeing much to suggest, in the face of the hockey stick of doom, that the other isn't.
I don't know what you wrote and I agree that it is very sad that the skill of writing is very undervalued at this moment. But I think that trend is not new and in reality not created by AI (just accelerated). But I think value of writing was never in the writing itself but the knowledge and ideas behind the writing. Because mechanics of writing sped up (handwritten, typewriter, word processor). But the process of writing a novel did not speed up significantly as the bottleneck is the ideas and iteration on those ideas not the delivery of the output. Similar to how programming is more then typing code.
So I think the real crisis right now is that people equate typing speed with programming speed (or writing speed) and due to advances in the former undervalue the later.
Sadly the reality is that it won't pay for the bills anymore.
Perhaps in a while people will realize how important the quality of ideas (and the iteration to arrive at them) is.
Sometimes what needs translated to food and shelter isn't your thoughts, however. If you nurture and value thoughts regardless, this point will be understandable.
How do you define value?
I mean, if the demand remains the same and the supply goes stratospheric, the value has to go down.
After all, purchasers don't very well care that your product has creativity, etc and that that other identical product was just an AI cloning your product.
People are flooded by new projects and assume (rightly) that most are low-signal, so they don’t engage. Because there’s low engagement, new projects get even less visibility. That reinforces the belief that nothing interesting can be built anymore.
I ship earlier now (often free and open source) to learn faster, but it doesn’t change the attention dynamics much.
The bottleneck isn’t building. it’s distribution and who already has an audience. Now dont get me started on getting an audience. thats a whole different pain.
1) I made a product to help people manage their diets; crowded space so it was hard to find users, following Steve Blank's customer-development process I found that the product should have been made for Dietitians not for end users. This may have been obvious to most but it was but to me at the time.
2) I made a product for Medicare/Medicaid but it was hard to get my foot in the door to even be considered for any of the Gov. contracts, so following the same model again I found that if I used politicians that had made promises during their campaign that my product could help them to fulfill then I could use them as distribution channels.
One thing I disagree with or don't understand is
> ship earlier now (often free and open source) to learn faster, but it doesn’t change the attention dynamics much.
I have found the opposite, it seems like the bar is much higher now and not even the boost in productivity that I have gotten from using AI has allowed me to ship secure/high quality products as fast as I would like to; perhaps I am just too insecure about my work but its all new I guess.
* Attention span won't stop them recognizing a solution
* Numerous solutions won't stop them adopting one
* That the developer put little effort into building that solution won't put them off.
The real answer is of course that there's a lot of stuff that being built that doesn't solve people's problems people have, either because it targets a problem that doesn't really exist or because it fails to solve the problem it does target.
The result of the barrier to entry being erased is that prices will also be driven to 0 as products are commoditized
It's hardly worth going into a market when you're 1 of 1000 and profit margins are at 3%
Any creativity you add, new spin you put on it, new features, innovation.. all that has negligible cost to copy
I don't think we're quite there yet, but this is where it's quickly heading
Then when I raised from a16z and had some money in the bank it didn't get any easier. The money didn't help (maybe it wasn't enough). Ad spend or content marketing or paid channels were all hard regardless of the free vs paid.
Maybe I just wasn't good at it.
That was before AI and you had to manually pound the bits into place.
Now with AI yes there are a lot of people shipping a lot of things but humans can tell when someone's put effort into something vs not and the time to traction is still as high as it always was.
Someone should do some analysis on number of things that go "viral" or gain adoption quickly today vs 5 / 10 years ago.
Getting traction has always been hard. Thats just business.
>The thing I launched last week is called Kith — a paid, invite-only social network
Social networks already is an existing competitive space and making it both paid and invite only obviously will hurt its adoption. I wouldn't have been surprised if this failed to get users even if it was free and even if this was preLLM. A brand new social network doesn't truly solve users problems.
Broken Git link: https://github.com/elliotbonneville/elliotbonneville.com
So yeah, techno-feudalism is going to drive us back to agrarian feudalism.
"One of the great benefits of AI tools, is they allow anyone to build stuff... even if they have no ideas or knowledge.
One of the great drawbacks of AI tools, is they allow anyone to build stuff... even if they have no ideas or knowledge."
into
"One of the great benefits of AI tools is they allow anyone to build stuff, even if they have no ideas or knowledge. One of the great drawbacks is they allow anyone to build stuff."
which removes the rhetorical effectiveness of the comment (and also breaks the promise of a quotation). I recommend that OP represents the source exactly.
____
I now see that this article contains multiple GPT-isms
> One of the great benefits as well as one of the great drawbacks of AI tools, is they allow anyone to build stuff... even if they have no ideas or knowledge.
I'd paraphrase it with "said that" since the quotations indeed present as though verbatim.
> I launched something last week. 14 people signed up — no ads, just a couple of posts. 14 real people who didn't have to. That number is tiny and it felt like something. Then I sat down to think about what it would take to grow it and I couldn't look at that math for very long.
They launched a paid social network, with no content available without joining a waitlist.
This would not have worked 20 years ago either. Bootstrapping the content for a _free_ social network is incredibly hard. But a paid social network where the only differentiating factor is that users are humans, and there is no activity in the network? Not going to work.
I understand it was already the trend 25 years ago, but way before that you really weren't expected to be able to make money building things for the internet.
The internet itself was simply not designed for that to begin with.
Building things where the internet was an element was already getting bad enough.
The force from within to return to "normal" baseline may yield, but probably never go away.
>The people winning mostly had a head start. Or they have money. Usually both.
As said every millennium since institutions and finance have existed.
>Show HN, the one place the internet was supposed to notice if you built something real.
No no no no no. This is for people who want to share with a much more limited audience than the entire internet.
HN readers did notice a lot of times especially when the project is amazing, OTOH sometimes the latest little side project from somebody well-known, or random interest could be shown.
Naturally the most popular things are free since that's inherently the most compatible with the internet anyway.
But real marketing and promotion is supposed to be far away from this site. If you're trying to sell to "the internet" you've got the whole rest of the internet for that.
HN is not supposed to be enough to be widely noticed at all, if you've got something that's worth marketing, YC is there the whole time and might be able to get you making the most of the internet and then some. Especially if you need a moat of money.
But why do so many people think the only business plan is to prepare to be sieged by a small enough horde which can be deterred by a moat anyway?
>if you're not already moving, you might never take off.
>The cost of acting like it isn't true when it is: permanent.
As I first mentioned, the internet being in place so people can make money off of it is the thing that just wasn't true to begin with, lots of people had some pretty good workarounds for a while though.
I've been watching businesses from startups to large corporations lock in high costs the exact same way for decades before the internet ever came around.
"Wrong side" means that people on that side have to work harder to reach us. The terms of the trade did not change because creators are not starting to pay us to get our attention. Well, it happens sometimes: free trials, free tiers, coupons, etc. but it's a well established practice. The post contains a reference to "do more marketing".
So the attention was there but not the conversion.
Each thought is just worth so much more
https://finance.yahoo.com/news/retail-investors-access-space...
It would be hilarious if the final "IPOs" will be in SPAC form with the help of SPAC king Chamath.
>This is not new. What's new is the scale. An AI can wake up (or whatever it does at 3am) and ship twelve of these before breakfast.
That's fun, I'm sure if somebody actually checked that and graphed it, you would not be able to pinpoint when AI starts on the graph
Hey, so I'm thinking about getting my car washed..
This article reads as overly hyperbolic; cashing in on the AI hysteria. AI derangement.
I’m young so that’s probably part of it, only ~12 years into my career and haven’t experienced too many world defining shifts.
There are people who are sick of social media and will never be convinced to join up again. They've already left the building and aren't looking for anything else. I'm not quite there, but almost.
Other people are using established social media simply because that's where their people and orgs publish. I am eternally frustrated when my local cafe uses Insta or FB for their "web presence", but I'm not going to be the one to convince them to use something else. I hate that my local rock climbing partner finder group is located on FB, but what can I do about it? I also think it sucks that there are thousands of people in that group - I soon realized that this group simply doesn't work for me, since rock climbing requires high trust and I can't trust thousands of people.
Many people resist the idea of signing up for yet another social media account, esp when none of their people/orgs are already there. For example, I've sometimes thought of starting a Heylo group for local rock climbers to find partners - this might actually help me find more climbing partners. But I've never tried it. I just don't think people will join. The barrier to entry is (1) install app (2) create login (3) use app. SFAICT no one wants to do this if they're already on FB and already are a member of the group there. Even people that I know manage finding partners with email lists (gag). Can you imagine how much higher the barrier to entry would be if adding (4) you have to pay a monthly fee?
I do like the idea of "only allowed to invite someone that you know in meatspace" but how is this enforced? I also recognize that requiring payment could help increase the trust level, and I recognize that members have to pay in some way (ads, fees, sponsors, privacy violations) in order to support the platform.
I'm old (52) and a bit AI hysterical despite being well aware of the reasons I supposedly shouldn't be (variations of Jevon's Paradox, the fact that we've had similar disruptions before, etc).
I can't help but think that both the speed and massive breadth of the AI disruption across so many industries all at once makes this a very different risk than anything we've experienced before, in my lifetime or before it.
It also doesn't help that at least here in the US this is all occurring when our government is both openly corrupt and particularly dysfunctional at solving any of the real-world problems facing its own citizens.
There must also be some value in advertising to the "eyeballs" of the AI? Even if they don't (yet) make that much decisions about spending, they do influence human decisions.
the gravitational threshold thing is real ngl. I've seen the same dynamic in product launches - identical quality, completely different outcomes based on whether you're already above the line or not. that part holds up
not sure the "creativity is the moat" counterargument fully lands either. yeah taste matters, but AstroBen's point is valid - anything that gets traction gets cloned basically immediately now. so creativity gets you first mover advantage for like... a week?
maybe the actual moat is just community? people who already trust you before you ship. which is a form of reach I guess, so kind of proves the point
But I also saw many people like him including the author of Flask. Also the author of XcodeBuildMcp, tailwindcss
This is a good point. If there's a problem reaching people because the information channel is saturated, the solution is to increase the information? And then everyone reaches the same conclusion and increases.
This destroys the channel. It's not a zero sum game. If everyone markets, nobody will make the sale because the customer will nope out and see nothing.
AI has certainly made it so much simpler to just pump "something" out (slop), but did it actually make building something that went through hundreds and thousands of iterations significantly cheaper?
I also like to think AI is really raising the bar for everybody. In the past, you could easily get away launching a product with a crappy landing page and a couple of bugs here and there, is that still the case? Don't people just expect a perfect landing page at this point (when's the last time anybody specifically talked/ thought about responsiveness?) paired with a flawless onboarding etc.?
Maybe the guy doing their 9-5 can run many agents to make them money while they work their day job.
Is that a thing, you get hired at some company then you use an agent to work for you, deep fake video calls, cursor code... that would be crazy. Get another job and split your time between agents for minor corrections.
No! I fundamentally reject this.
The value of unoriginal thinking has gone down. Thinking which is quotidian and pedestrian has become even more worthless than it already was.
The value of true, original human thinking has gone up even higher than it ever has been.
Do we think no new companies will ever succeed now? Of course not. Who, then, will succeed? It will be innovators and original thinkers and those with excellent taste.
Why did stripe make big inroads in developer spaces even if they are in an ultra competitive low margin market? They had excellent taste in developer ergonomics. They won big not because they coded well or fast (though I know pc thinks their speed is a big factor, I think he is mostly incorrect on that) but because they had an actual sense of originality and propriety to their approach! And it resonated.
So many other products are similar. You can massively disrupt a space simply by having an original angle on it that nobody else has had. Look at video games! Perhaps the best example of this is how utterly horribly AAA games have been doing, while indie hits produce instantly timeless entries.
And soon this will be the ONLY thing that still differentiates. Artistic propriety, originality, and taste.
(And, of course, the ever-elusive ability to actually execute that I also don't think LLMs will help with.)
Or an absurd amount of skill.
Say Amy is a great NodeJS and front end programer.
She can work on her own projects , but her kids can't eat hope and dreams.
Or she can get a job at SoulCrusher Solutions trying to maximum advertising revenue.
Imagine American manufacturing industry workers saying the same thing of the (at the time) soon-to-be import only products. Original thoughts are valued more than non-original ones but maybe, the market doesn't require that many original thoughts to extract max profit...
But these new builders have a tool, they don’t suddenly have a newfound creativity.
I think with time we will stop seeing what we consider AI slop, simply because we know it’s not worth sharing. Instead great creative people will share very impressive things that simply wasn’t possible to build before.
The only real fix is incredibly heavy taxation of income and wealth for the ultra rich individuals and ultra large companies. That is what will break through the money moat and create fair competition.
there's more problems then ever before that need empathetic humans to solve - are you up for the challenge - or you're doing a quick cash grab
due to people using machine gun approaches - spray & pray - we haven't forgotten how scalable human touch is -- yeah at first - you've to do things the manual way - reach out have a conversation - but slowly word spreads around without you spending money on ads | content etc
To be honest this is what is discouraging me from writing more novels right now. The only reason I'm even considering it is because the love of the craft is hooked firmly in my gullet. Were it not for that I'd drop writing faster than a lava potato...
And then there's classic confirmation bias; a lot of people wrote in dry academic prose.
Current examples: esoteric calculations that are not public knowledge; historical data that you collected and someone else didn't; valuable proprietary data; having good taste; having insider knowledge of a niche industry; making physical things; attracting an audience.
Some things that were recently difficult are now easy, but general perception has not caught up. That means there's arbitrage—you can charge the old prices for creating a web app, but execute it in a day. But this arbitrage will not last forever; we will see downward price pressure on anything that is newly easy. So my advice is: take advantage now.
Kind of nice to know I don’t have to blame myself anymore.
There’s not the slightest chance an LLM or less than capable developer is whipping this stuff out in a day.
You know that if anything you build gets traction, it'll be cloned by 100 people, right?
Is the purpose of a computer program to use processing, network and memory? Or is it to handle and manipulate information to give results which are useful to people?
Now the moat of having memorized intentionally convoluted and complicated programming languages has been taken away. Exactly like the printing press removed the monopoly on information which was held exclusively by priests and monks.
When tools make a job easier, they open up new markets for people to do and sell things which were too costly to offer before. AI translation alone means that small businesses can open up several markets they didn't have any access to, broadening the number of potential customers immensely.
Software to most of this discussion is a web app with a landing page, a pricing tier, and MRR. That's it. The frame is "product," the metric is "traction," and the canvas is "things people pay $9/month for."
But software is instructions that make matter and energy do things they wouldn't otherwise do. It's the most general-purpose tool humans have ever built. So let's actually think about what's underbuilt:
The whole damn physical world is barely instrumented. Agricultural systems, water infrastructure, building envelopes, soil health, local microclimates. There are farmers making irrigation decisions on vibes. Municipal water systems with no real-time leak detection. Buildings hemorrhaging energy because nobody's modeled their thermal behavior. These aren't apps. They're control systems, and they're mostly missing.
Fabrication and manufacturing are being transformed by CNC/3D printing but the software for designing things to be manufactured is still terrible (and inaccessible!). Generative design that accounts for material properties, toolpath constraints, assembly sequences. CAM software is where word processors were in 1985.
Scientific instruments. A spectrometer is mostly software now. So is a radio telescope. So is a seismograph. Every goddamn thing can be a thermometer (accidentaly!) The gap between "data sensor exists" and "useful scientific instrument" is almost entirely software, and most of that software is written by grad students in unmaintained Python.
Preservation. Some people are doing this with datamuseum.dk. But expand it: there are entire musical traditions, oral histories, craft techniques, ecological knowledge systems that exist in living memory and nowhere else. Software for capturing, encoding, and transmitting that knowledge barely exists. Not "an app for recording grandma," but formal knowledge representation of, say, how a master boatbuilder in Kerala selects wood by sound and flex.
Prosthetics and rehabilitation. This one is big for me personally! The gap between what a modern prosthetic limb could do with good software and what it actually does is enormous. Why are my eyeballs still chunks of plastic? Same for cognitive rehabilitation tools, speech therapy systems, physical therapy feedback loops.
Governance and collective decision-making. Every organization above 20 people is making decisions with tools that are basically "email plus meetings plus a shared doc." Formal deliberation systems, preference aggregation, transparent resource allocation. These are hard computer science problems that nobody's building because they don't have obvious MRR.
Tools for thought that aren't note-taking apps with backlinks. Actual reasoning aids. Argument mapping. Assumption tracking. Decision support that makes your thinking better rather than your typing faster.
The entire domain of formal verification applied to things that matter. Bridges, medical devices, voting systems, financial settlement. We have figured out how to prove some? software correct. We almost never do it for the software where correctness actually matters.
And that's me, one person, in five minutes. Every domain expert in the world is sitting on a pile of unsolved problems that software could address, and most of them have never talked to a programmer because programmers are busy building the next task management app.
Go talk to a nurse, a farmer, a building inspector, a food bank logistics coordinator. Ask them what's broken. I promise the answer isn't "nothing" and I promise nobody on ProductHunt is solving it.
PG wrote essays about this ffs! "Make something people want." "Live in the future and build what's missing." That advice didn't stop being true because AI made the building part cheaper. If anything it's more true now, because the building is almost free, which means the noticing is almost the entire game. You are skipping the noticing and going straight to the building, then wondering why nobody cares.
The number of hard things isn't going down. This thread can't see them because it's not looking at the world. It's looking at ProductHunt.
To make things concrete, in the last week I have been working on my open source speech synthesizer, rebuilding Klatt's ideas from the 1980 paper up to modern emotion/prosody work. Did you know the whole field went nuts for neural approaches in ~2018 and there's a whole shitload of interesting papers just sitting out there that nobody has ever implemented in a real system? Did you know that a bunch of people did research into what different human emotions sound like and now I can make a depressed speech synthesizer, or, scarily, one which sounds more honest to people?
AI seems like the odd man out of the group, until you understand the utter horror that is weaponized post-scarcity economics. "The only moat left is money" is the plan. It was always the plan. The goal of AI - or at least, the goal of AI to the cult of people who mindlessly agree with it is to replace humans with pliant digital slaves.
A handful of people doesn't own most of the country by accident.
I am so sick of the pretense that GDP growth means inequality is somehow illusory. Yes, TVs used to be expensive and now they are cheap. Big whoop.
Wealth concentration is dangerous for democracy, the markets and society.
If you look at the history of the US, for instance, railroad regulation was brought forth largely by the railroads because they found it impossible to form a cartel to keep up prices (due to "secret" discounting) so instead they created regulation that outlawed the kind of discounting that breaks cartels apart. A similar thing happened in banking where the banks asked for a central bank to cartelize the interest ranks to stabilize their oligopoly. And the same in pharma industry -- big pharma loves high regulatory barriers because it keeps competitors out.
A large portion of the regulation in the US was brought about as regulatory capture by corporations to increase the monopolizing effects and destroy the free market.
That's patently false. AT&T was a monopoly and they were broken up by antitrust regulation. The absolute most you can say is that some regulations enable monopoly. I contend that we simply should pass the good kind of regulations instead.
Monopoly is enabled by market forces such as economies of scale. Monopolization is a natural market process which happens on its own unless it is actively prevented.
> big pharma loves high regulatory barriers because it keeps competitors out
The FDA, for all the flaws of its current incarnation, is the archetype of necessary regulation. Pre-FDA, the free market did nothing whatsoever to prevent nauseating practices like the adulteration of milk with powdered plaster, lead, and cow brains. The history there is fun but quite gross.
> Somalia
What is notable about Somalia is not its lack of regulation, but the fact that it is perhaps THE least stable country on the planet. It is not the basis for any useful comparison here.
>That's patently false. AT&T was a monopoly and they were broken up by antitrust regulation.
This is patently false in the context of the reply you have made -- after the invention of the telephone more and more and eventually hundreds of telephone services popped up. Then in 1918 (circa WWI), the government effectively quasi-nationalized AT&T by controlling it via a commission and the postmaster general and then AT&T leveraged politicians to create "universal telephone service" provided by AT&T and regulate competitors out of the market while using regulatory capture to use commissions to regulate rates, effectively creating a cartel that drove competitors out of business via regulation.
the whole idea of a "natural market process" here is absolute and utter hogwash. The majority of the market was AT&T competitor up until the regulators stepped in and turned it into an unnatural monopoly enforced by regulatory capture.
>The FDA, for all the flaws of its current incarnation, is the archetype of necessary regulation. Pre-FDA, the free market did nothing whatsoever to prevent nauseating practices like the adulteration of milk with powdered plaster, lead, and cow brains. The history there is fun but quite gross.
You're now arguing why we need regulation rather than whether they create monopolies or not. I see this as a complete red herring, although an interesting topic, that there are some counterpoints to.
> What is notable about Somalia is not its lack of regulation, but the fact that it is perhaps THE least stable country on the planet. It is not the basis for any useful comparison here.
What is notable is that the whole thesis is without regulation it turns into this monopolized hellscape and every inspection of that theory turns out to be false, and sometimes even the opposite.
Might I introduce you to the concept of a "natural monopoly"? https://en.wikipedia.org/wiki/Natural_monopoly
Anyway, what regulation is responsible for Walmart and Amazon putting local retailers out of business?
> the government effectively quasi-nationalized AT&T
After a big merger put AT&T in charge of the majority of telephone lines in the US, the company used its control over infrastructure to drive its competitors out of business and increase its portfolio. The Justice Department tried to break up AT&T but failed; it was in the settlement of this case that AT&T was first federally regulated in 1913. Yes, AT&T's monopoly grew between 1913 and 1982, but your causality is backwards. They regulated it because it was already a monopoly.
Walmart + Amazon combined are only ~16% of the retail business. They're not monopolies. The fact they put a small minority of businesses out of business does not mean they're a monopoly. This is likely part efficiencies and also part regulatory capture via the insane zoning/building regulations in this country and tax breaks that can favor large corporations.
> After a big merger put AT&T in charge of the majority of telephone lines in the US, the company used its control over infrastructure to drive its competitors out of business and increase its portfolio. The Justice Department tried to break up AT&T but failed; it was in the settlement of this case that AT&T was first federally regulated in 1913. Yes, AT&T's monopoly grew between 1913 and 1982, but your causality is backwards. They regulated it because it was already a monopoly.
... It was not already a monopoly. Hundreds of phone companies emerged and by shortly before your noted date of "regulation" those competitors held the majority market share. It became a "monopoly" after the government literally quasi-nationalized them (AT&T) to the point the fucking Postmaster General was basically in charge of it, they became intertwined with regulators, and then the drive for "universal telephone service" and regulatory commissions ensured the regulatory compliance pushed exactly into AT&Ts business model. AT&T intertwined lawmakers even brought in economics quacks to talk up natural monopolies to argue for policies to create the regulations that made AT&T a monopoly. So you have it backwards -- the regulated it from a minority market holder to an unnatural monopoly and lawmakers created this monopoly under the auspices they essentially needed to legislate a "natural" (misnomer) monopoly into existence.
One should understand the phenomenon as a common pattern of dynamics in unregulated markets. Not every snapshot will showcase an end state of monopolist dominated markets.
You bring up a valid point though. Regulatory capture is a indeed a weapon in the hands of anti-competitive players to prevent incumbents. Good policy usually applies differently to different strata: the small players are exempt from certain rules, or have to deal with less stringent ones than big players do, to prevent killing the market. At the risk of sounding like an llm: it is not just about policy, it is about good policy.
Kinda a terrible example, as cellular telephones are highly regulated in Somalia: https://en.wikipedia.org/wiki/National_Communication_Authori...
Even in cases where FGS is in control -- even then xeer law on property rights and law often supersede written law of FGS. For instance, on occasion Somali population has straight up killed FGS soldiers/police and Somalian government has deferred to xeer courts and said "welp that is fine." Xeer law in particular has a very liberal free-market view on inter-familial entrepreneurism (although with a lot of intrafamilial and tribal dues which hinder it in practice) which is at odds with what outside law has tried to impose upon it.
NCA has rather limited influence in somalia, and definitely not of the sort that could break up a monopoly if one existed.
The food industry is filled with regional monopolies.
> cellular telephone service in Somalia
Ah yes, excellent example, all you have to do is completely destabilize your nation and you too can have free market capitalism.
Investors love monopolies, they fix prices and profits so their investments are not at risk. Investors hate too much competition, it lowers profits and puts their investments at risk.
Free markets need investors. Investors hate free markets. I hope you see the problem here.
Abundance of copy cats that cannot make any money as prices are raced to zero.