How many of those are just a minor prompt + API call to OpenAI?
My first startup was literally just some Javascript and a Postgres database. It didn't even call any external services, let alone one that's truly on the bleeding edge of computer science. I still thought it was a viable business (wrongly, it turned out, but still... I had a dream!).
"Some JavaScript and a DB" is a web service. It does stuff. Sure if it's small or a basic crud then the moat is small
But if I can replace the value proposition of a startup with "open chatgpt and type a short prompt" then there's not much value in it right. Maybe if there's value in the surrounding services.
This is how many successful businesses operate in the "atoms" world.
You take a product or service that's already popular and has a solid channel for distribution, you transform it or add additional value to it and sell it for a profit.
Think about a $8 precut, packaged pineapple at the grocery store.
Once you get your business going and get additional funding or generate cash flow, you can invest in getting rid of some of the middlemen so that you can take their profits too (start growing your own pineapples).
Sounds pretty straightforward, but the selling part is the difficult one.
The value proposition to the sliced pineapple is the time and skill to do it. Sure, it's "cheap" to do it at home (if your time is free and you have a good knife - I pay way less than $8 though ;) )
While I do believe there are startups with good value added, I think a lot of people are just throwing a simple call with very little thought added. And while the service is sellable, your moat is how easy people can duplicate it.
Is your service a product or a feature? If it's a feature OpenAI can just add it to their systems in a day
Especially when these products can be built by a school student in an hour using ChatGPT?
I think the barrier of entry to atoms world companies are quite higher than that.
Generally yes, software is usually easier, although today you can start a new brand of vodka or cosmetics from your computer.
Customers acquisition is equally difficult for both though, so sales and marketing is where the secret sauce and differentiation is now, not so much in the codebase, I think.
Is what it is