Defensibility & Competition: Rethinking Strategies in the AI Era

Embracing Change: The Continuous Transformation from Mobile to AI

We’ve seen these disruptive cycles a gazillion times before. Web 1, Web 2.0, mobile, Web 3 (meh, don’t get me started about this one) and now AI. All of these cycles always have similarities among them along with differing macro-economic trends that temper them slightly. I’ve gotten to live through all of these and it always surprises me that we have the same conversations over-and-over as if we don’t learn from history.

One topic I keep hearing about is the concept of defensibility & competitors. It’s a really valid topic especially if you’re heading out to try to raise money. This is almost always the first question you get from potential investors and I have spent a lot of time thinking about it, and, honestly making up a bunch of bullsh*t around it. However, I really like Elad Gil’s post about this that one of our advisors shared with me over the weekend. Sometimes you just shouldn’t worry about defensibility & competition in the early days.

Anytime we have a disruptive cycle founders and investors all turn to the playbooks that got them through the last cycle. They use the same buzzwords and tactics to take on the latest disruption without taking a hard look at the actual changes happening in the industry and how the playbook needs to be reworked.

When we started Airship (Urban Airship to us) back in 2009 the mobile landscape had just gone through a massive change but it hadn’t taken hold yet. The iPhone was still new and shiny but it was far from the massive success it is today. Steven Ballmer at MSFT was still calling it cute and we were still making our way on EDGE networks. Barely.

At the time, to succeed in mobile you had to know how to build apps for a range of devices and you had to work through the gatekeepers of RIM and Nokia FIRST and then have your fingers crossed to get a deal with carriers to keep your app on their phones. Uptake was abysmal and even if you threaded that needle it didn’t mean success.

Then the iPhone takes off with the App Store and soon after push notifications and in-app purchases. All of the sudden brands could build an app that directly connected with the consumer without having to talk to a bunch of vendors. Build the app, get it in the App Store and bam, you’ve got users who you can reach directly in their pocket. While not overnight, this shift led to every single major brand on the planet thinking about how they could reframe their businesses around mobile and not just have it be some promotional tool. Think like how Starbucks integrated mobile into their entire retail strategy, not just how somebody released another fart app.

No RIM or Nokia. No carriers in the mix. Now all of a sudden I had brands kicking down our door with fistfuls of cash demanding our services along with a laundry list of 20 other features they wanted. Big brands like ESPN, Warner Brothers, Starbucks and others. But I couldn’t convince investors to take a bet on us (btw — this is 100% my fault). The iPhone and this disruptive cycle happening with mobile created a beachhead that was JUST ENOUGH for us to build an interesting business. I couldn’t have gotten meetings with those folks without it.

What I realized later is that investors were using the same pre-iPhone playbook. “Aren’t you just going to get crushed by the carriers and SMS?” “How many fart apps can there really be? This market can’t be all that big …” “What about RIM and Nokia? They aren’t going away.” I got laughed out of a lot of investor meetings.

Instead of figuring out a story or response to this question around defensibility & competition, we just shipped great products and sold to customers wanting our stuff. Just like Elad points out, sometimes that is the moat you need in the early days. You can figure it out later.

The exact same thing is happening in AI. Arguably the biggest disruptor in a generation (AI) and most playbooks involve SaaS and investment from funds with unlimited capital. Just keep growing the top-line. The difference with this cycle (the overlaying macro environment) is that industries that have been reluctant to adopt tech are going to be forced to this time. Learning quickly and rethinking each element of the playbook you use to tackle this new normal is critical.

At CaseMark, we have tried a lot of things in the last 6 months and we learned a lot of what doesn’t work but all it took was that one thing that did to make it all go. AI is the beachhead that is giving us the ability to talk to customers who wouldn’t have ever even picked up the phone. Now, we’ve bootstrapped our way deep into significant ARR and we haven’t even announced our most interesting product. We might raise money down the road, but if we do it will be with the right partner and on our terms. In the mean time, we’re just going to keep building and shipping great products to our customers that want more and more from us.

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We’re bootstrapping CaseMark and looking to add some folks to the team. If you know anybody with a legal background, a full-stack engineer or customer experience (sales + support) that is looking for a crazy growth job opportunity, send them my way people!