AI Adoption and the End of Traditional Competition

📝 You've been kicked out of the arena, you just don't know it yet If AI adoption had 7 stages of grief, almost all of you would be in denial. No matter how many AI memos your CEO sends, the amount of Claude that's being Coded, the chatbots in app and the evals in data--I'm here to tell you: you're not competing. In fact, you probably can't anymore. And you won't notice until it's too late. A going concern = the walking dead I look around and see a lot of businesses that would have, 3 years ago, been pretty enviable. $100M+ in revenue, solid customer base, mature executives, and a good enough team. On the surface, a few of them are trying to meet the moment. Whether by choice or by force, AI has worked it's way into little parts of the business and the product. They have some internal AI power users. They're slapping on chatbots and MCPs to their product suite. They have a natural-language interface for their product named after a girl or a gem or a spaceship. They start to say things internally like we need to be "cursor for X" or "claude code for y" or (perhaps worse) "we have a proprietary data moat they'll all need," and in the meantime the pot keeps boiling. While they try on the bows and ribbons of an AI-native team, they ignore the fact that their bones are old and the company has calcified. For the most part: sales still sells the same and marketing is still talking about channels and CAC and product says "prioritize" and eng says "capacity" and the board is endlessly asking either about Q1 perf and Q2 projections or the ever-elusive "increase in product velocity." Some, but not all, engineers are coding with AI > 50% of the time. Some, but not all, designers have access to the main repo, will gently ask for a PR. Some, but not all, the roles that could have been replaced have been. There are still so many decks, so many meetings, so many things that are pushed to later or when we have headcount or after we wrap this quarter. They feel busy and look at their revenue and their customers and the movement (note: not the speed) of the team and they think "I'm in the arena!" Your peers aren't your competition anymore The reason it's so easy to convince yourself and an entire company that you are totally in the game is you think your competition is who they've always been and will act about the same as they always have. Because guess what? You're who you've always been and you'll act the same as you always have. You'll be in the same deals. Have the same marketing tactics. You'll ship equal proportions of new product and make noise about them in just about the same way. You'll call on and hire the same class of VPs, the engineers with the same YOE and backgrounds, the same PMs with "domain expertise." You'll listen to the same podcasts and forward the same tweets. You'll have the same ideas for how AI is going to transform your business, and you'll pitch the same mini-pivots to the board. You'll all say you'll do this without alienating the core. Without giving up what you've built so far, that you're so good at, that no one else could possibly do. But this is not your competition anymore. There are startups that are doing everything you claim to be doing with AI, but without thinking about or working too hard at it. They naturally reach for the right tools and have no processes they need to circumvent to get access to them. While you are debating what % of R&D should be allocated to AI initiatives, they have built the product idea you have sitting on a slide, called on your customers, and established their wedge. You probably won't know until renewal time. You probably won't appreciate it until your best talent starts to leave & work for them. You won't know it till you're cooked. Everything > 1 day: ngmi I have a simple heuristic for identifying who has been kicked out of the arena and it's this: They can't do anything the same day. It doesn't matter what it is, but I'll give you a list of things I've seen companies be unable to do in a day: Fix bugs Launch landing pages Upgrade to a new model Get a PM on a call with a customer Get access to a new AI tool Turn around negotiations on executive comp Before AI, this was a less useful heuristic because many of these took scare expertise (engineering) and therefore time. But now we have the clarifying light of AI: if you can move fast and yet you don't--it's a you problem, babe. Startups: don't underestimate the level at which the big guys won't compete with you I'm not sure if it will be healthy to give startups more swagger at this point (from what I see, most have it in spades), but I still think some teams completely underestimate the level at which incumbents have taken themselves completely out of lucrative games. Markets that previously felt like winner-has-all are wide open. For two reasons: The fundamentals of what product is is changing so much, there's ability and appetite for new things in old markets. These companies cannot get out of their own way if their lives ARR depended on it (it does) As a startup, I'd take bigger bets, be more aggressive in the market, and not only take market share from your friendly neighborhood BigCo, but I'd steal their best employees, too. I'd simply DM the ones I wanted about the cost of staying and see who replies. I'd code up a ripoff of 80% of their core product, and launch it on X for 20% the cost. I'd be obviously Having More Fun™️ online. I'd play a game they're too busy in QBRs to notice. How to avoid fate There are a few, a very very few, who are the exception here. They are the ones with the CEO pushing PRs, the VPE DM-ing with users (not buyers! USERS!), the unhinged kid with little oversight on marketing. They will rip out entire functions, they will fire executives, and they will halt everything in service of not missing a generational technology shift. They'll say "F the core" and buy who they need to buy to rebuild the company. They'll (yes) bring the team back to the office. Or they'll rearchitect the entire company in .md one weekend, open Claude Code during the all hands and say: this is the new office. They might, just might, have the guts and the capital to make it. But probably not. But I can't blame you for wanting to try, so if I were at one of these companies this is what I would do: Everyone up-skilled immediately, stop the presses, show up in 2 weeks and show me how you've automated 80% of your job. If you've done this--congrats! You get a new more exciting job. If you haven't... what are we doing here? Get legal + security + finance to stop being annoying about trying new tools. Let your best engineers loose on making your repo agent-friendly. Resistant execs out the door. Resistant engineers out the door faster. More aggressive than comfortable M&A. You probably can't build what you want. You might be able to buy it. You should know every one and everything worth acquiring in your market, and try to get to them early. Rebuild your product from scratch. Just try. If it takes < 2 week, ask yourself what that means from your company. Hire executives sparingly, and carefully. Same day SLA for anything (bugs, polish, copy) that can be done well by AI. Unabashedly learn from whoever you can. Beginners mindset, especially if you're a CEO or exec I'm happy to help you try. But it'll be no use if you don't realize the arena has packed up and left town without you. So take a look around. Ask yourself: where am I? And more importantly: where am I not? http://x.com/i/article/20238728098067456…