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Comment by light_triad | Hacker News Reader

AI enables new tools & features but in itself is not a product.

There's a good essay from Andrew Chen on this topic: Revenge of the GPT Wrappers: Defensibility in a world of commoditized AI models

"Network effects are what defended consumer products, in particular, but we will also see moats develop from the same places they came from the past decades: B2B-specific moats (workflow, compliance, security, etc), brand/UX, growth/distribution advantages, proprietary data, etc etc." [1]

Also check out the podcast with the team at Cursor/Anysphere for details into how they integrate models into workflows [2]

[1] https://andrewchen.substack.com/p/revenge-of-the-gpt-wrapper...

[2] https://www.youtube.com/watch?v=oFfVt3S51T4&t=1398s

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Yeah - these are not moats though.

Moats are the logistic network that Amazon has.. ok spend $10bn over 5 years and then come at me - if I didn't sit still...

Moats are what Google has in advertising... ok, pull 3% of the market for more money than god and see if it works..

brand/ux is not a moat, it's table stakes.

One could aregue the "non-moats" together can accumulate into something considerable making it moat. A brand is definately a moat but in the minds of consumers. This is not something you can overcome easily, even if the product is inferior.

Kleenex is probably a good example of this. Tissues are a commodity but nevertheless people will still pay more for Kleenex branded tissues. That feels like a moat to me.

Agreed UX can be easily copied, but brands are a moat for a number of (granted, psychological) reasons:

1. Status symbols - my Lambo signifies that my disposable income is greater than your disposable income

2. Fan clubs - I buy Nikes because they do a better job at promoting great athleticism, and an iPhone to pay double for hardware from 3 years ago

3. Visibility bias - As a late adopter I use whatever the category leader is (i.e. ChatGPT = AI, Facebook = the Internet)

What you describe sounds more like market power resulting from a monopoly

I think that UX cannot always be easily copied.

Technology enables UX. When the underlying technology is commodity—which is often the case—it's easy for competitors to copy the UX. But sometimes UX arises from the tight marriage of design and proprietary technology.

Good UX also arises from good organization design and culture, which aren't easy to copy. Think about a good customer support experience where the first agent you talk with is empowered to solve your issue on the spot, or there's perfect handoff between agents where each one has full context of your customer issue so you don't have to repeat yourself.

It’s ironic that you chose Lamborghini and Nike because they are examples of brands that didn’t provide any appreciable moat for the first two decades of operation.

Their value proposition almost entirely relied on selling for cheaper than their more famous, at the time, competitors. e.g. Ferarri, Adidas, etc.

It’s only after many years of slowing building up credibility did the brand value start to matter.

>brand/ux is not a moat, it's table stakes.

Except for the technical advantage of M-series macs that's like all of the Apple moat. Apple brand and UX is what is selling the hardware.

They make the UX depend on the number of Apple devices you have, so a little bit of network effect. But that's mostly still UX.

>> Moats are what Google has in advertising

Lots of people, these days, just use ChatGPT to search the web these days. I've actually never understood google search ads, as I have never clicked on one, even by accident 10+ years. If I want to buy something I search within Amazon for it.

YouTube however, yeah, that is a stellar advertising platform.

unless you adblock. But i concede if you don't block, you do get advertised to in an amount that i would describe as "astronomical", so there's even a parallel there.

I don't use adblock, so yes, lots of ads.

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