For years, the holy grail of tech startups has been building scalable products—SaaS platforms that promise high margins, minimal customer friction, and exponential growth. But the truth is, no matter what you’re building, you’re not just selling a product. You’re selling the ecosystem of services around it.
Take OpenAI as an example. It started as an AI research lab, transitioned into an API-first business, and then moved into full-fledged consumer products like ChatGPT. But OpenAI’s moat isn’t just the model—it’s the entire infrastructure they’ve built around it: the continuous research, enterprise support, partnerships, fine-tuning tools, and now, Deep Research, their high-end analysis tool leveraging chain-of-thought reasoning.
And yet, in a perfect display of irony, OpenAI is now being disrupted by its own technology.
Not long after OpenAI’s Deep Research emerged (built off the buzz around DeepSeek’s LLM breakthroughs and their hedge fund-backed approach to reasoning models), an open-source alternative came out. It offers a similar experience without the $200-a-month price tag.
This isn’t new. It’s a recurring pattern:
- Stability AI made open-source image generation a viable alternative to DALL·E.
- Meta’s Llama models are chipping away at the exclusivity of proprietary AI models.
- DeepSeek took the reasoning-based LLM approach and turned it into a hedge fund-powered R&D play.
Even Sam Altman himself has admitted that finding gaps in OpenAI’s offerings is a bad long-term strategy—because those gaps get filled, either by them or by someone else. And as we’ve seen, it’s not just OpenAI doing the filling—it’s individuals, research collectives, and even hedge funds.
So what’s the lesson?
You can’t just build a product. You have to build a service layer around it.
The most resilient businesses aren’t just selling software or AI models; they’re selling an ongoing relationship, trust, and an experience that users can’t easily replace.
How Do You Stay Ahead?
Ride the Wave, Don’t Fight It.
Instead of trying to carve out a temporary niche that will inevitably get filled, lean into the momentum of the market and figure out how you can add lasting value.Recognise That AI (or Any Tech) is Not the Moat.
The real moat isn’t just the tech—it’s distribution, ecosystem, integrations, and customer relationships. OpenAI’s GPT-4 is incredible, but its real strength is its ecosystem—business contracts, enterprise deals, compliance, and developer tools.Build the Best Services You Can.
The companies that win aren’t just the ones with the best tech but the ones offering the best support, workflow integration, customisation, and user experience.Accept That Innovation Moves Fast—But Services Create Stickiness.
Someone will always build a cheaper, open-source, or more efficient version of what you offer. The question is, why would customers still choose you?
At the end of the day, we’re all in the services business. The sooner we embrace that, the sooner we can build businesses that don’t just survive the next wave of disruption—but ride it to something even bigger.
