A16Z and HubSpot advise founders to build outside frontier AI paths
Industry leaders argue that startups should avoid competing directly with frontier labs on horizontal capabilities. Instead, they recommend focusing on vertical workflows and data context to build durable value.
A16Z partner Joe Schmidt and HubSpot CTO Dharmesh Shah have outlined a strategy for startups navigating the current AI landscape. They argue that while frontier labs like OpenAI and Anthropic are pursuing high-visibility paths with massive valuations, significant opportunities exist for building software outside of direct competition with these models.
Shah warned against developing products that merely fill gaps in current frontier models, such as features that ChatGPT cannot yet perform. He noted that these capabilities are likely to be absorbed by the labs over time. Instead, he advised founders to target areas where frontier labs face structural or incentive constraints, such as specific vertical workflows or unique customer contexts. Shah compared ChatGPT and Claude Cowork to a new operating system or browser, serving as interfaces to underlying value. He emphasized that the core value for business software lies in the work being done and the data context, not the interface itself. This approach allows companies to plug into AI interfaces without being displaced by the underlying model providers.