new summation pod with @arampell, general partner at a16z who runs their $2.7 billion Apps practice and led early bets on Plaid, Mercury, and Opendoor. we get into why Visa is the purest network effect business on earth, why the best companies have hostages not customers, and what was once payroll becoming payments.

there are no more moats anymore. moats are dead. was talking to a friend of mine who's a CEO of a rapidly growing startup (~$1B revenue). we're small investors. He told me that he has only taken one one-week vacation in the last eight years of his startup. I was like, "Hey this is crazy. You're gonna burn out. This is pretty serious." he said, "Auren, I don't know what to do. We don't have no moat." am like, "What are you talking about? The business is going great!" he said, "We have incredible competitors. We sell AI products and so we're selling to the smartest people in the world. If we don't have the best product that week, they won't buy us. If we don't have the best product for two weeks, our customers will churn. We don't have a moat." I started thinking about it: who does have a moat? There are just no moats anymore. Nobody has a moat. Everyone will switch their software providers in a heartbeat for better product or for cheaper product or for faster product. Anyone will switch. We looked at our 200 companies at Flex Capital and how they're buying software and AI services today. Almost all of their vendors are on month-to-month contracts or on usage-based contracts. That means they can switch immediately. The reason they have everyone on month-to-month is that they have no idea if they're going to be using those tools two months from now. They may not even be using those tools two weeks from now. Everything is changing so fast all the time. The only moat you have in software is that you have the best product. There are just no other moats. It used to be back in the day that you have a mediocre product and you'd be using it for years. we just dealt with all these of mediocre software systems, mediocre cloud providers, mediocre data providers, mediocre APIs. we dealt with it because the switching costs are really hard. Nowadays it's really easy to change software. It's really easy to change APIs. it's really easy to change AI infrastructure. It's super easy. You can change it in a heartbeat and every other vendor will help you switch. Of course, your AI tools will help you switch as well. All these things that used to give very high customer lock-in just don't exist anymore and so they're just no more moats. Moats are dead.  you just need to work insane hours all the time because the only thing you have is your product. goodbye moat, goodbye predictable revenues, goodbye 2010s era.

🎧 World of DaaS this week 🎧 @BenMillerise (CEO of @fundrise) talks public/private market convergence, real estate tech, future of office + commercial, recession forecasting, and much more