Comment by DesaiAshu

This (particularly the figure 1 illustration) discounts the "distribution" layer for apps

Single app/feature startups will lose (true long before AI). A few will grow large enough to entrench distribution and offer a suite of services, creating defensibility against competitors

The distributors (eg. a SaaS startup that rapidly landed/expanded) will continue to find bleeding edge ways to offer a 6-12mo advantage against foundation models and incumbents

GitLab is a great example of this model. The equivalent bitter lesson of the web is that every cutting edge proprietary technology will eventually be offered free open source. However, there is a commercial advantage to purchasing the bleeding edge features with a strong SLA and customer service

The mistake is to think technology is a business. Business has always been about business. Good technology reduces the cost of sale (CAC) and cost of goods sold (COGS) to create a 85-90% margin. Good technology does not create a moat

Resilient businesses do not rely on singular technology advantages. They invest heavily in long term R&D to stay ahead of EACH wave. Resting on one's laurels after catching a single wave, or sitting out of the competition because there will be bigger waves later, are both surefire ways to lose the competition