Startups building Workflow products for other Software Startups – Beware

3 hours ago

Founders are building under the 'Eye of Sauron,' with foundation model labs becoming all-seeing competitors.
Competition now comes from four vectors: incumbents, startups, foundation models, and customers.
Evaluate startups across three dimensions: Buyer Capability, Buyer Agency, and Product Architecture (workflow vs. chassis).
Workflow products are more exposed if buyers are high-agency and high-capability, as they may build their own solutions.
Software for software companies is at high risk, especially horizontal workflow applications for tech-savvy organizations.
Low capability and low agency customers (e.g., enterprise, services-heavy) are now more attractive due to slower procurement.
Building around model deficiencies is risky; assume models will eventually do everything.
Survival depends on strategic speed, domain mastery, and focusing on human problems (e.g., selling, trust, compliance).
Chassis products (infrastructure layer) offer a safer position, as they solve deeply technical problems enterprises struggle to adopt.
Atoms-over-bits opportunities (e.g., robotics, hard tech) have real moats like proprietary hardware and regulatory approval.
Despite risks, this is an exciting time to build, with customers eager to adopt new tools and revenue potential higher than ever.

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